New Home Mortgage Applications & Refinance Applications Increase as Prices Recover

Mortgage applications for new home purchases and refinance applications both experienced increases as home prices recover, according to the Mortgage Bankers Association (MBA) June 2015 Builder Application Survey (BAS) and Weekly Mortgage Applications Survey for the week ending July 10, 2015.

The Builder Application Survey shows that mortgage applications for new home purchases increased by 1 percent relative to the previous month, and this change does not include any adjustment for typical seasonal patterns.

"As house prices continue to recover, mortgage applications for the purchase of newly constructed homes increased slightly in June,” said Lynn Fisher, MBA's VP of research and economics. “Application activity in June was slightly higher compared to the past two years, leading us to estimate that new homes sales increased 8 percent from May on a seasonally adjusted annual basis."

MBA Builder Application Survey Highlights:

• By product type, conventional loans composed 67.2 percent of loan applications, FHA loans composed 19.6 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 12.2 percent. The average loan size of new homes increased from $320,744 in May to $321,678 in June.
• The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 496,000 units in June 2015, 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 June is an increase of 8.1 percent from the May pace of 459,000 units. On an unadjusted basis, the MBA estimates that there were 45,000 new home sales in June 2015, unchanged from May.

According to the MBA Weekly Mortgage Applications Survey, mortgage applications decreased 1.9 percent from one week earlier. On an unadjusted basis, the index increased 9 percent compared with the previous week. The refinance index increased 4 percent from the previous week. The seasonally adjusted purchase index decreased 8 percent from one week earlier. The unadjusted purchase index increased 3 percent compared with the previous week and was 17 percent higher than the same week one year ago.

MBA Weekly Mortgage Applications Survey Highlights:

• The refinance share of mortgage activity increased to 50.8 percent of total applications from 48.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.4 percent of total applications.
• The FHA share of total applications increased to 13.8 percent from 13.7 percent the week prior. The VA share of total applications remained unchanged from 10.8 percent the week prior.
• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged from 4.23 percent, with points increasing to 0.39 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Click here to view the Builder Application Survey.

Click here to view the MBA Weekly Mortgage Applications Survey.