Mortgage applications are on the rise—both for the month and over the year, according to the recent Builder Application Survey released by the Mortgage Bankers Association (MBA) on Tuesday.
Compared to January this year, February saw a 15.9 percent jump in mortgage applications for new homes, rising from 44,000 to about 51,000. Year over year, applications jumped 2.2 percent—a “modest annual gain,” according to Lynn Fisher, Vice President of Research and Economics at MBA.
“The bar was high, as last February was a particularly strong month for applications, as was March 2016,” Fisher said.
According to Fisher, job gains likely played a role in the uptick from January to February, and they should continue to impact application rates—and homeownership rates in general—as the year goes on.
“The surprisingly strong employment numbers for the beginning 0f 2017 suggest that demand for new homes should continue to grow this year,” Fisher said.
Though the survey’s numbers were not adjusted for seasonal patterns, Fisher said MBA expects “seasonally adjusted new home sales to be up by about 8 percent in February compared to a year ago.”
Currently, the seasonally adjusted estimate shows a 4.3 percent increase from January to February—totaling about 562,000 units.
Drilled down, conventional loans made up the bulk of all new home loan applications at 66.5 percent. The remainder was comprised of FHA loans (18.6 percent), VA loans (13.6 percent), and RHS/USDA loans (1.3 percent).
According to the BAS, the average loan size of new homes increased in February, too, jumping from $329,860 to $330,208 month over month—a difference of slightly more than $400.
The Builder Application Survey measures mortgage application data, including loan type and total loan amount, from home builders at the national, state, and local level. Its results are released monthly by the MBA. To learn more about the survey or its results, visit MBA.org.