Data released Tuesday from the MBA’s Builder Application Survey (BAS) shows that mortgage applications for new homes in October 2017 had a 16.1 percent increase compared to October 2016. October 2017 marked a 23 percent increase compared to the previous month. These numbers were not adjusted for seasonal patterns.
The MBA states that conventional loans composed the vast majority of applications last month at 71.8 percent while the FHA loans came in at a close second at 15.1 percent. The other types included VA loans at 11.7 percent and RHS/USDA loans at 1.4 percent. Additionally, September 2017’s average loan size of $334,722 increased to $339,534 in October, according to the report.
Data from the BAS survey cited in the report states that new single-family home sales were running at 659,000, adjusted for the season. According to the MBA, mortgage application information from the BAS along with assumptions about market coverage influences this number.
Regarding total home sales, the report states that October’s seasonally adjusted rate was a 15.4 percent increase from September’s pace of 571,000. Using unadjusted numbers, the report found that there was a 53,000 new home sale increase in October, which marked a 26.2 percent increase from September’s 42,000 home sales.
“October registered the strongest growth rate in applications so far this year, following September’s hurricane related decrease,” said MBA Vice President of Research and Economics Lynn Fisher.
According to the MBA, the BAS survey gets its findings by tracking application volume across the country from mortgage subsidiaries of home builders. Additionally, the MBA can provide early estimates of new home sales volumes at national, state and city levels. The survey also provides information on the loan types used by new homebuyers along with sales estimates conducted by the Census Bureau monthly.