MBA estimates that sales of new single-family homes were running at a seasonally adjusted annual rate of 543,000 units in January 2014, based on data from MBA’s Builder Applications Survey.
“While the big jump may appear to conflict with other data, such as MBA’s purchase application index and NAR’s existing home sales data that point to a weak market for existing homes, our Builder Application Survey estimate is consistent with reports of homebuilder sentiment that show strength in the market for new homes,” says Mike Fratantoni, MBA’s Chief Economist. “It is also worth noting that the significant January increase also followed a particularly slow pace of sales in November and December.”
The estimated 543,000 unit sales pace for January was an increase of 35 percent from December’s pace of 402,000 units. On an unadjusted basis, the MBA estimates that there were 38,000 new home sales in January 2014, a 36 percent increase from the level of 28,000 units in December 2013. The new home sales 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 by 27 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.
By product type, conventional loans composed 69.4 percent of loan applications, FHA loans composed 15.9 percent, RHS/USDA loans composed 1.3 percent and VA loans composed 13.4 percent. The average loan size of new homes decreased from $300,444 in December to $289,358 in January.
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. This data also provides information regarding the types of loans used by new home buyers. 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.
For more information, visit www.mortgagebankers.org.
