The Mortgage Bankers Association (MBA) has just released the first installment of a new measure of loan activity designed as a monthly companion piece to its Weekly Mortgage Application Survey. The Builder Application Survey (BAS) will capture mortgage loan application activity at lending subsidiaries of large single-family home builders. Participants in the survey collectively account for approximately 20 percent of new home sales based on Census Bureau estimates.

Using information from these large builders across the country and data from other sources MBA says it will be able to provide an early estimate of new home sales volumes as well as information on the types of loans used by new home buyers. As explained by Mike Fratantoni, MBA's Vice President of Research and Economics, the new survey focuses entirely on the new home market and is intended to correlate with the U.S. Census Bureau's new homes data.

"MBA's Weekly Application Survey, which has been in existence for 23 years, includes a measure of purchase application volume," Fratantoni said. "However, with existing home purchases currently running at ten times the level of new home purchases,the purchase index reported every week is more closely correlated to trends in existing home sales and those sales are reported when the deals are closed, often 45 days or more after the initial contract signing and mortgage 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. This is why we believe the new Builder Application Survey should track closely with, and predict, new home sales."

BAS data for June shows a 15 percent decrease in applications for new home purchases on a non-seasonally adjusted basis compared to May. Conventional loans made up 67.3 percent of applications, 17.3 percent were FHA loans and VA loans had a 13.4 percent share. RHS/USDA loans made up 1.9 percent of the total. The average loan size for new home purchases decreased from $283,795 in May to $283,000 in June.

Utilizing information from the BAS, as well as assumptions regarding market coverage and other factors, MBA estimates that sales of new single-family homes were running at a seasonally adjusted annual rate of 413,000 in June 2013.  On an unadjusted basis, the MBA estimates that there were 39,000 new home sales in June 2013.

Fratantoni said that the BAS will provide additional color on the composition of new home sales as well as a leading indication of developments in that market. He said that, as MBA expands the survey, it will release additional data and metrics including information on the state and metropolitan area level.