Applications for new home purchases jumped 15.6 percent in April compared to a year ago and were 3.0 percent higher than in March. The Mortgage Bankers Association said these non-seasonally adjusted numbers indicate there will be a strong increase in new home sales for the month.
"There was a healthy increase in new home purchase activity in April, boosted by the strong economic and employment conditions seen in the first quarter of 2019," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Applications for new home purchases increased, as did our estimate for new home sales. After two months of declines, MBA estimates that April new home sales were 10 percent higher than last April and reached the highest annual pace since this survey's inception in 2013."
Based on MBA mortgage application information from the MBS's Builder Application Survey (BAS,) as well as assumptions regarding market coverage and other factors, MBA predicts new home sales they will be up by 6.2 percent from the seasonally adjusted annual rate of 676,000 in March to 722,000 units. On an unadjusted basis, MBA estimates that there were 69,000 new home sales in April 2019, an increase of 4.5 percent from 66,000 new home sales in March.
Conventional loans accounted for 70.7 percent of loan applications, and FHA loans for 17.1 percent Applications for VA loans had an 11.5 percent share of the total and RHS/USDA loans 0.6 percent. The average loan size of new homes increased from $331,794 in March to $338,745 in April.
MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing 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. 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. The Census Bureau report for April will be released on May 23.