New Survey Forecasts Decline in June New Home Sales

The ""Mortgage Bankers Association"":http://mbaa.org/default.htm (MBA) released another new monthly survey measuring mortgage loan application activity on new single-family properties for lenders affiliated with homebuilders.

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The Builder Application Survey (BAS), unveiled on Thursday, was created to capture application trends as an early indicator of new home sales. While the MBA has a weekly survey measuring purchase application data, that index is more closely aligned with trends in existing-home sales, which are which are often reported 45 days or more after the initial contract signing and application.

""In contrast, the Census Bureau's estimate of new home sales is based on initial contract signings, which most often occur around the same time as the mortgage application,"" said Mike Fratantoni, VP of research and economics for the association. ""This is why we believe the new Builder Application Survey should track closely with, and predict, new home sales.""

According to MBA, the inaugural survey for June 2013 shows mortgage applications for new home purchases declined 15 percent compared to May. The change doesn't include any adjustment for typical seasonal patterns.

By product type, conventional loans made up 67.3 percent of loan applications; loans insured by the Federal Housing Administration (FHA) composed 17.4 percent, loans insured by Rural Housing Services (RHS) or the U.S. Department of Agriculture (USDA) made up 1.9 percent, and loans insured by the Department of Veterans Affairs (VA) made up 13.4 percent.

The average loan size for new home purchases was $283,000 in June, a decline of $795 from May.

Using information from the survey and other assumptions regarding market coverage, MBA estimates that sales of new single-family homes were running at a seasonally adjusted annual rate of 413,000 in June. On an unadjusted basis, the group estimates there were 39,000 new home sales.