Home mortgage applications jump in March

According to the Mortgage Bankers Association's latest Builder Application Survey for March 2017, mortgage applications for new home purchases increased 6.7 percent compared to March 2016. Compared to February 2017, applications increased by 23 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns. "Mortgage applications for new homes accelerated in March, with the Builder Application Survey Index reaching its highest point since the series began in August 2012," said Lynn Fisher, MBA's Vice President of Research and Economics. "The pick up from a fairly modest February showing suggests that developers are finding ways to bring new product on line to help supplement otherwise low inventories of existing homes for sale in the US. In contrast to the increasing trend in average loan size in our Weekly Application Survey which reports on applications for both new and existing homes, the average loan size for new homes in March from the Builder survey was unchanged from a year ago. Looking at the full distribution of applications, nearly two-thirds of applications for new homes in our survey have loan sizes between $200,000 and $400,000." By product type, conventional loans composed 67.5 percent of loan applications, FHA loans composed 18.6 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 12.8 percent. The average loan size of new homes decreased from $330,208 in February to $328,192 in March. The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 670,000 units in March 2017, 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.