Purchase Apps Point to Drop in May New Home Sales

After seeing a resurgence in April, early indicators suggest new home sales figures are in for another decline in May.

The Mortgage Bankers Association (MBA) reported Friday that applications for new home purchases fell 8 percent from April to May, indicating a seasonally adjusted annual sales rate of 374,000 units.

If the numbers play out that way, it will be the lowest pace of sales since July 2013. On an unadjusted basis, the association estimates there were 36,000 new home sales last month, a 14.3 percent decline from April.

Meanwhile, MBA stuck to its April sales estimate of an annualized 419,000 new units sold. According to preliminary figures from the Census Bureau, new residential sales were at a rate of 433,000 in April.

The Census will release its own preliminary estimates of May new home sales on June 24.

Calculating data from its monthly Builder Applications Survey (BAS), MBA reported conventional loans accounted for 69.3 percent of May applications for new home purchases. Applications made through the Department of Veterans Affairs comprised 13.6 percent, while applications through the Federal Housing Administration composed 15.5 percent.

The average loan size of new homes was $296,427 in May, down from $299,094 a month prior.