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Home >> Daily Dose >> Mortgage Apps on the Rise
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Mortgage Apps on the Rise

Strong economic fundamentals and a growth in jobs were complemented by a rise in the number of people buying homes at the beginning of 2018 according to data from the Builder Application Survey released by MBA on Tuesday.

The survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, it provides an early estimate of new home sales volumes at the national, state, and metro level.

The survey indicated that mortgage applications to buy new homes increased 18.4 percent compared to January 2017 and by 34 percent when compared with data from December 2017.

“Mortgage applications for new homes surged in January and were up 18 percent on a year over year basis,” said Lynn Fisher, VP, Research and Economics at MBA. “This complements other positive news on US job growth suggesting that economic fundamentals are strong.”

According to the Builder Application Survey data, new single-family home sales were running at a seasonally adjusted annual rate of 700,000 units in January 2018. The seasonally adjusted estimate for January showed an increase of 26.4 percent from the December pace of 554,000 units.

“Based on applications, we estimate that new home sales were running at a pace of 700,000 on a seasonally adjusted annual basis—the highest such estimate in our survey which began in 2013,” Fisher said. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

On an unadjusted basis, the survey estimated, there were 54,000 new home sales in January 2018, an increase of 35 percent from 40,000 new home sales in December.

By product type, conventional loans comprised 71.7 percent of loan applications, FHA loans made up 15.3 percent, RHS/USDA loans 1.2 percent, and VA loans comprised 11.7 percent of the total loan applications. The average loan size of new homes decreased from $339,203 in December to $338,918 in January.

About Author: Radhika Ojha

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Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. You can contact her at [email protected]

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