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Mortgage Apps Experience Year-Over-Year Rise

According to the most recent MBA Builder Applications Survey (BAS) data, mortgage applications for new home purchases experienced an increase of 7.8 percent compared to December 2016. However, applications decreased by 18 percent month-over-month. According to the report, this change did not include any adjustment for typical seasonal patterns.

Lynn Fisher, MBA VP of Research and Economics explained that after playing catch-up for two months following the slowdown caused by hurricanes Harvey, Irma, and Maria, mortgage applications for new homes declined in December to a more normal growth rate.

“Based on December applications, we forecast that new home sales fell in December but remained nearly 16 percent higher than a year ago, and we are anticipating only modest year-over-year growth for new home sales in 2018,” said Fisher. “Despite robust demand, a lack of labor and land will continue to constrain homebuilders.”

In addition, the survey, which tracks application volume from mortgage subsidiaries of home builders across the country, estimated new single-family home sales were running at a seasonally adjusted annual rate of 554,000 units in December 2017, a decrease of 16.4 percent from the November pace of 663,000 units.

On an unadjusted basis, the survey estimated there were 40,000 new homes for sale in December 2017, a decrease of 14.9 percent from 47,000 new home sales in November. These estimates were derived using mortgage application information from the survey as well as assumptions regarding market coverage and other factors.

Providing data information on the types of loans used by new home buyers, the survey results reported that conventional loans made up 72.5 percent of loan applications, FHA loans produced 15.1 percent, RHS/USDA loans composed 2.3 percent, and VA loans collected 10.1 percent. In addition, the average loan size of new homes increased to $339,203 in December—compared to $337,427 in November.

About Nicole Casperson

Nicole Casperson is the Associate Editor of DS News and MReport. She graduated from Texas Tech University where she received her M.A. in Mass Communications and her B.A. in Journalism. Casperson previously worked as a graduate teaching instructor at Texas Tech's College of Media and Communications. To contact Casperson, e-mail: nicole.casperson@thefivestar.com.

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