The Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS) data for August 2020 shows mortgage applications for new home purchases increased 33.3 percent compared to a year ago. Compared to July 2020, applications decreased by 4 percent.
“The housing market continued to exceed expectations in August, as housing demand for new homes stayed strong and the job market continued to recover,” says Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite economic uncertainty and the pandemic’s distortion to typical seasonal patterns, the comparisons to August 2019 show strength.
“Purchase applications increased over 33 percent, and MBA’s estimate of new home sales were up over 11 percent,” he adds. “The seasonally adjusted annualized rate of sales was 871,000 units in August, the second strongest of the year and well above the 785,000 units sold a year ago.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 871,000 units in August 2020, 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 August is a decrease of 2.1 percent from the July pace of 890,000 units. On an unadjusted basis, MBA estimates that there were 68,000 new home sales in August 2020, a decrease of 5.6 percent from 72,000 new home sales in July.
By product type, conventional loans composed 69.1 percent of loan applications, FHA loans composed 19.2 percent, RHS/USDA loans composed 1.1 percent and VA loans composed 10.5 percent. The average loan size of new homes increased from $345,929 in July to $348,576 in August.