New Home Mortgage Applications Dip 8% in May

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According to the Mortgage Bankers Association (MBA) Builder Application Survey for May 2014, U.S. mortgage applications for new home purchases decreased by 8 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.

By product type, conventional loans composed 69.3 percent of loan applications, FHA loans composed 15.5 percent, RHS/USDA loans composed 1.7 percent and VA loans composed 13.6 percent. The average loan size of new homes decreased from $299,094 in April to $296,427 in May.

The MBA estimate of new single-family home sales were running at a seasonally adjusted annual rate of 374,000 units in May 2014, 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 May is a decrease of 10.7 percent from the April pace of 419,000 units.  On an unadjusted basis, the MBA estimates that there were 36,000 new home sales in May 2014, a decrease of 14.3 percent from 42,000 in April.