Applications for mortgages for new home purchases jumped 19% in March compared with February and were up 7% compared with March 2018, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS), which tracks application volume from mortgage subsidiaries of home builders across the country.
This change does not include any adjustment for typical seasonal patterns.
“With a strong job market, rising wages and lower mortgage rates, housing demand remains strong, as shown by the solid seven percent growth in new home purchase applications in March,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “The confluence of declining mortgage rates with the spring buying season is supporting stronger housing demand and activity. Additionally, the drop in average loan size suggests that builders are tilting production to lower-priced homes, which continues to see the tightest inventories and strongest home-price growth.”
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 676,000 units in March. That’s a decrease of 2% compared with the February pace of 690,000 units.
On an unadjusted basis, the MBA estimates that there were 66,000 new home sales in March, an increase of 11.9% compared with about 59,000 in February.
By product type, conventional loans composed 68.7% of applications for new home purchases. FHA loans composed 18.8%, RHS/USDA loans composed 0.5 percent; and VA loans composed 12%.
The average loan size for a new home sold in March was $331,794, down from $340,692 in February.