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Mortgage Apps Decrease by 20 Percent Month-Over-Month

The number of mortgage applications for new home purchases in April 2017 is 4.3 percent lower than that of April 2016, according to data collected in the Builder Applications Survey (BAS) by the Mortgage Bankers Association (MBA).

The BAS reported in March 2017, new single-family homes were selling at a seasonally adjusted rate of 670,000 units, compared to April’s rate of 517,000 units.

Applications dropped more than 20 percent after March, keeping with the previous two years’ trend, said Lynn Fisher, MBA's Vice President of Research and Economics.

Unadjusted, April saw 50,000 new home sales compared to March’s 62,000 home sales—a 19.4 percent decrease, according to MBA’s estimates. Additionally, the average loan size for these new homes also waned between the two months, from $328,192 to $326,284. The funds came from conventional loans, Federal Housing Administration (FHA), Rural Housing Service/United States Department of Agriculture (RHS/USDA), and Veterans Affairs.

"For the first time this year, mortgage applications for new homes in April were lower than the same month a year ago. Mortgage applications for new homes fell more than 20 percent in April after peaking in March, as they have the past 2 years,” Fisher said. “A relatively strong March may have pulled forward some applications from April, exacerbating the normal seasonal fall-off. On net, year to date applications for new homes are running about 3 percent above the same period from 2016. Despite steady demand for housing, homebuilders continue to face rising costs for labor and materials which will continue to moderate the pace of building."

MBA’s Mortgage Credit Availability Index (MCAI) also conveyed a 0.2 percent drop in mortgage credit availability, according to previously reported data.

"Conforming credit availability has slipped a bit since the beginning of the year, with fewer program offerings along a range of credit characteristics and no particular culprit," Fisher had said previously.  

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