MBA: Applications For New Home Purchases Up 5% In April

After rising more than 14% in March compared to February, applications for new home purchases increased 5% in April compared to March, on an adjusted basis, according the Mortgage Bankers Association's (MBA) Builder Application Survey (BAS).

On an unadjusted basis, the MBA estimates about 42,000 applications for new home purchases were filed in April, nationwide – an increase of 8% from 39,000 in March.

By product type, conventional loans composed 68.4% of loan applications for new home purchases, Federal Housing Administration loans composed 15.8%, Rural Housing Service/U.S. Department of Agriculture loans composed 1.6% and Veterans Affairs loans composed 14.2%. The average loan size for a new home was $296,428 in March, compared to $299,094 in April.

Based on data from the BAS, as well as assumptions regarding market coverage and other factors, the MBA estimates that new single-family home sales were running at a seasonally adjusted annual rate of 419,000 units in April.

The sales pace for March had initially been estimated at 479,000 units.

Interestingly, even though applications for new home sales were up more than 14% in March, compared to February, according to the MBA, the U.S. Census Bureau reported last month that, overall, new home sales dropped 14.5% in March, compared to February, to reach their lowest level in eight months. This could be an indication that a larger percentage of home shoppers are being declined on mortgages, due to tighter credit credit requirements.

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