Mortgage Applications for New Home Purchases Up 4.0% Month-Over-Month in February

The Mortgage Bankers Association (MBA) is reporting that data from its February Builder Application Survey (BAS) reveals mortgage applications for new home purchases increased 4.0% from January and were 1.2% higher year-over-year. This change does not include any adjustments for typical seasonal patterns.

According to the MBA, the seasonally adjusted estimate for new single-family home sales in February is 688,000—a decrease of 5.1% from the January pace of 725,000 units. On an unadjusted basis, the MBA estimates that there were 61,000 new home sales in February, a 3.2% decrease from the 63,000 new home sales in January.

Adding additional background and his analysis, MBA’s Vice President and Deputy Chief Economist Joel Kan said:

“Applications for purchase new home sales were up in February and from the same time a year ago. The uptick in new home purchase applications showed a seasonal pick up, and that segment of the market continues to show healthier activity than the broader purchase market, which is still showing annual declines of over 30 percent. Buyers, however, remain extremely sensitive to movements in mortgage rates and the broader economy. Mortgage rates picked up in February, which put a damper on housing activity.

The 5 percent drop in the estimated new home sales pace for February to 688,000 units reversed a January gain when buyers had a brief respite from rising mortgage rates, combined with discounts and concessions from sellers. The decline in new home sales is likely less than that for existing home sales as home builders are motivated to sell homes in their construction pipeline.”