Applications for mortgages to purchase newly constructed homes jumped significantly in February the Mortgage Bankers Association (MBA) said today.  Data from MBA's Builder Application Survey, which is not seasonally adjusted, was up 12 percent compared to January numbers.

"An increase in mortgage applications to builders in February over strong January numbers bodes well for new home purchases this year," said Lynn Fisher, MBA's Vice President of Research and Economics. "Applications in both January and February were up on a year over year basis."

Based on the application data, assumptions regarding market coverage, and other factors MBA estimates that sales of newly constructed single-family homes are running at a seasonally adjusted annual rate of 487,000 units.  On an unadjusted basis MBA estimates that 42,000 new homes sold in February compared to 39,000 in January, an increase of 7.7 percent.  On a seasonally adjusted annual basis, however, the rate is down 8.1 percent from the adjusted annual projection of 530,000 units in January. 

Of the new home purchase loan applications received in February 65.4 percent were for conventional loans, 20.7 percent were for FHA- and 12.7 percent for VA-backed loans.  Rural Home Service/USDA loan applications comprised 1.2 percent of the total.  The average loan size of new homes increased from $304,364 in January to $311,379 in February.

MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country and using it and other data to provide an early estimate of new home sales volumes at the national, state, and metro level. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.