The Mortgage Bankers Association [1] (MBA) Builder Application Survey (BAS) data for May 2023 shows mortgage applications for new home purchases increased 16.6% [2] compared from a year ago. Compared to April 2023, applications increased by 8%.
“Purchase activity for newly built homes was strong in May, with builders continuing to bring homes to the market and buyers keen to act on available units,” said Joel Kan, MBA’s VP and Deputy Chief Economist. “Applications for purchase loans were up on a monthly basis and increased annually for the fourth consecutive month. Our estimate of new home sales also jumped in May, up 16% to the fastest pace of new home sales in 15 months.”
“The new home sales segment continues to gather momentum, growing at a pace of 5% compared to a year ago, while existing-home sales in recent months continue to experience annual declines of more than 20% on a non-seasonally adjusted basis," said Kan. "These results were also broadly in line with the Census data showing an uptick in residential housing starts and permitting in recent months.”
MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report [3], is that new single-family home sales were running at a seasonally adjusted annual rate of 755,000 units in May 2023, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for May is an increase of 16.3% from the April pace of 649,000 units. On an unadjusted basis, MBA estimates that there were 64,000 new home sales in May 2023, an increase of 10.3% from 58,000 new home sales in April.
By product type, conventional loans composed 67% of loan applications, FHA loans composed 22.8%, RHS/USDA loans composed 0.3%, and VA loans composed 10%.
Overall, the average loan size of new homes increased from $401,756 in April to $403,581 in May.
To read the full report, including more data and methodology, click here [2].