New Home Mortgage Applications in U.S. Increase 12 Percent Annually

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According to the Mortgage Bankers Association's Builder Applications Survey data for November 2016, mortgage applications for new home purchases in the U.S. increased 12 percent relative to November 2015. Compared to October 2016, applications decreased by 3 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.

"Mortgage applications for new homes continued to grow on a year over year basis in November, driven by continued improvement in the overall economy and job growth," said Lynn Fisher, MBA's Vice President of Research and Economics. "Despite the fact that overall home prices have increased at a greater than 5 percent annualized rate, the growth in average loan size for new homes has slowed, increasing 3 percent in November to $329,400 from a year ago and up just 1 percent since January."

By product type, conventional loans composed 67.3 percent of loan applications, FHA loans composed 18.3 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 13.8 percent. The average loan size of new homes decreased from $329,634 in October to $329,389 in November.

The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 588,000 units in November 2016, 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 November is an increase of 7.5 percent from the October pace of 547,000 units. On an unadjusted basis, the MBA estimates that there were 41,000 new home sales in November 2016, a decrease of 6.8 percent from 44,000 new home sales in October.

MBA's Builder Applications Survey tracks application volume from mortgage subsidiaries of homebuilders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new homebuyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.