MBA Introduces Builder Application Survey

The Mortgage Bankers Association (MBA) has introduced a new Builder Application Survey (BAS) to accompany its Weekly Mortgage Application Survey.

Focusing exclusively on the new home market, the BAS measures loan application activity received by lenders affiliated with, or who work in cooperation with, home builders for loans on single-family properties.

Each monthly report will include a new home sales estimate based on mortgage application volume data derived from U.S Census Bureau data. The Census Bureau's data is based on contract signings, the MBA says. The estimate will also factor in market coverage assumptions and other metrics. What's more, the data will be adjusted in the same manner as the Census Bureau's data, the MBA reports.

Initially, the survey will cover about 20% of market participants, but the MBA plans to expand that coverage over time and will adjust its assumptions accordingly. The data will be broken down by state and metropolitan area in future reports, the MBA said.

‘MBA's Weekly Application Survey, which has been in existence for 23 years, includes a measure of purchase application volume,’ said Mike Fratantoni, vice president of research and economics for the MBA. ‘However, with existing home purchases currently running at 10 times the level of new home purchases, the purchase index reported every week is more closely correlated to trends in existing home sales, and those sales are reported when the deals are closed, often 45 days or more after the initial contract signing and mortgage application.

‘In contrast, the Census Bureau's estimate of new home sales is based on initial contract signings, which most often occur around the same time as the mortgage application,’ he added. ‘This is why we believe the new Builder Application Survey should track closely with, and predict, new home sales.’

The inaugural report shows that applications for new homes decreased 15% in June compared to May.

Conventional loans made up 67.3% of applications – 17.3% were FHA loans, and 13.4% were VA loans. RHS/USDA loans made up 1.9% of the total.

The average loan size for new homes decreased from $283,795 in May to $283,000 in June, according to the report.

The BAS estimates that sales of new single-family homes were running at an annual rate of 413,000, seasonally adjusted, in June. On an unadjusted basis, the MBA estimates that there were 39,000 new home sales for the month.

To download a copy of the report, click here.


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