The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for December 2019 shows mortgage applications for new home purchases increased 38.7 percent compared to December 2018. Compared to November 2019, applications decreased by 5 percent. This change does not include any adjustment for typical seasonal patterns.
“The sizeable year-over-year increase in new home purchase activity in December capped off what was a strong 2019 overall,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Our seasonally adjusted estimate of December new home sales was virtually unchanged from November, forecasted at an annual pace of 689,000 units.”
Added Kan, “The housing market is seeing signs of a more significant recovery in new residential construction, which is a promising sign for prospective homebuyers. Even though supply continues to lag, we expect to see another year of gradual growth in new home sales, supported by rising household formation and the healthy job market.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 689,000 units in December 2019, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for December is an increase of 0.1 percent from the November pace of 688,000 units. On an unadjusted basis, MBA estimates that there were 48,000 new home sales in December 2019, a decrease of 5.9 percent from 51,000 new home sales in November.
By product type, conventional loans composed 68.7 percent of loan applications, FHA loans composed 18.4 percent, RHS/USDA loans composed 0.8 percent and VA loans composed 12.1 percent. The average loan size of new homes increased from $337,943 in November to $338,625 in December.
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.