Skip to content

New Home Sales Dip, Still Stronger than Last Year

October 11, 2018
by admin

The Mortgage Bankers Association (MBA) reports a drop in applications for the purchase of newly constructed homes last month. Those applications fell by 3.9 percent compared to August although they remained 8.2 percent higher than they were the previous September. The change does not reflect any seasonal adjustment. The information comes from MBA’s Builder Application Survey (BAS) which is conducted among the mortgage subsidiaries of new home builders.

Based on the survey data as well as other marketing data, MBA projects that new home sales were running at a seasonally adjusted annual rate of 643,000 units. The seasonally adjusted annual number in August was 669,000. On an unadjusted basis, MBA estimates that there were 50,000 new home sales in September 2018, a decrease of 5.7 percent from 53,000 new home sales in August.

Even though new home sales decreased 3.9 percent over the month, the average monthly number of homes sold so far this year (648,000 units) is around 8 percent higher than a year ago, and last month’s 8.2 percent 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.”

Conventional loans accounted for 71.0 percent of applications and FHA loans for 16.0 percent. VA loans had an 11.9 percent share and 1.1 percent were for RHS/USDA loans. The average loan size for new homes increased from $332,801 in August to $333,086 in September.

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. The Census Bureau report for September, issued jointly with the Department of Housing and Urban Development, will be published on October 24.

No comments yet

Leave a Reply

Note: You can use basic XHTML in your comments. Your email address will never be published.

Subscribe to this comment feed via RSS

Comment validation by @