Mortgage Bankers Association (MBA) Builder Application Survey data for March 2020 shows mortgage applications for new-home purchases increased 21.2% compared from a year ago. Compared to February 2020, applications increased by 14%.
“The strong increase in new-home purchase applications was likely because of falling mortgage rates and stronger economic conditions at the start of the month,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “This boosted activity and offset the coinciding decline once COVID-19-related disruption sapped demand in the following weeks.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 697,000 units in March 2020, based on data from the survey. The new-home sales estimate is derived using mortgage application information from the survey, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for March is a decrease of 6.6% from the February pace of 746,000 units. On an unadjusted basis, MBA estimates that there were 71,000 new-home sales in March – an increase of 10.9% from 64,000 new-home sales in February.
By product type, conventional loans composed 68.1% of loan applications, FHA loans composed 18.6%, RHS/USDA loans composed 1.4% and VA loans composed 11.9%. The average loan size of new homes increased from $340,169 in February to $344,556 in March.