Despite a monthly decline in apps, MBA says housing demand remains strong
Mortgage applications for new home purchases rose year over year but declined month over month in September, according to Builder Application Survey data released by the Mortgage Bankers Association (MBA).
Applications increased 8.2% compared to September 2017 but decreased 9% compared to August. The monthly change does not include any adjustment for typical seasonal patterns.
MBA estimates that new single-family home sales were running at a seasonally adjusted annual rate of 643,000 units in September. The seasonally adjusted estimate is a decline of 3.9% from the August pace of 669,000 units.
On an unadjusted basis, MBA estimates that there were 50,000 new-home sales in September, a decrease of 5.7% from 53,000 new home sales in August.
"Even though new home sales decreased 3.9% over the month, the average monthly number of homes sold so far this year (648,000 units) is around 8% higher than a year ago, and last month's 8.2% annualized gain in purchase applications points to continued demand for new homes," said Joel Kan, MBA associate vice president of economic and industry forecasting. "Housing demand is still strong even as mortgage rates increase, and as a result, we're still forecasting for modest growth in purchase origination volume in 2018."
During the month, conventional loans composed 71% of loan applications. FHA loans accounted for 16%, RHS/USDA loans composed 1.1%, and VA loans made up 11.9%. The average loan size for new homes increased to $333,086 in September from $332,801 in August.
