Data for February 2020 from the Mortgage Bankers Association’s Builder Application Survey (BAS) shows that mortgage applications for new-home purchases increased 25.9% compared from a year ago, while applications decreased by 1% compared to January 2020.
“Despite a monthly decrease in February new applications and estimated new home sales, the year-over-year trends were strong, with new applications increasing 26 percent, and our estimate of new home sales increasing right percent,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting.
“Looking ahead, there is significant uncertainty regarding how the coronavirus epidemic will impact the housing market, and some of January’s record-level activity could have been attributed to the warmer winter weather, lower mortgage rates,and the tight inventory of existing homes on the market – especially in lower price tiers,” he adds.
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 746,000 units in February 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 February is a decrease of 13.8% from the January pace of 865,000 units. On an unadjusted basis, MBA estimates that there were 64,000 new home sales in February 2020 – a decrease of 3% from 66,000 new home sales in January.
By product type, conventional loans composed 69.3% of loan applications, FHA loans composed 18.5%, RHS/USDA loans composed 0.8% and VA loans composed 11.4%. The average loan size of new homes decreased from $346,140 in January to $340,169 in February.