Mortgage applications for new-home purchases increased 0.6% in March compared with a year ago and 10% compared with February, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). The increase does not include typical seasonal pattern adjustments.
Consistently a leading indicator of the U.S. Census Bureau’s New Residential Sales report, MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 666,000 units in March, based on data from the BAS. For March, the seasonally adjusted estimate is a decrease of 3.2% from the February pace of 688,000 units.
MBA estimates that there were 65,000 new-home sales in March on an unadjusted basis—an increase of 6.6% from 61,000 new-home sales in February. The estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
“Mortgage applications for new-home purchases increased in March. Low for-sale inventory continues to constrain sales, along with mortgage rates that remain above 6%,” says Joel Kan, MBA’s vice president and deputy chief economist.
“MBA’s estimate for new-home sales was down 3% from the previous month. New-home sales will be key to the housing market recovery in 2023 as they account for an increasing share of purchase activity as home builders maintain construction levels and offer concessions for buyers. On the other hand, existing-home inventory remains low as many current homeowners are locked-in to their homes with a lower mortgage rate.”
In March, the average loan size of new homes increased from $406,953 in February to $407,015. By product type, conventional loans made up 66.4% of loan applications; FHA loans, 22.6%; RHS/USDA loans, 0.3%; and VA loans, 10.7%.
MBA’s BAS tracks application volume from mortgage subsidiaries of home builders across the country. Using this data, as well as data from other sources, MBA is able to provide an early estimate of new-home sales volumes at the national, state, and metro level.
