US New-Home Purchase Mortgage Applications Increase 0.3% in February

On Thursday, the Mortgage Bankers Association (MBA) reported that its February Builder Application Survey reveals that mortgage applications for new-home purchases increased 0.3%. Year-over-year, mortgage applications decreased 6.9%. Changes do not include any adjustment for typical seasonal patterns.

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate (SAAR) of 634,000 units in February, an increase of 2.9% from the January pace of 616,000 units. On an unadjusted basis, MBA estimates that there were 57,000 new-home sales in February, an increase of 1.8% from 56,000 in January.

By product type, conventional loans composed 56.7% of loan applications; FHA loans composed 32.1%; RHS/USDA loans composed 0.6%; and VA loans composed 10.6%. The average loan size for new homes decreased from $403,416 in January to $397,516 in February.

Commenting on the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“New-home purchase activity strengthened in February, in line with seasonal patterns, as higher housing inventory and declining rates supported growth, However, applications to purchase newly built homes were lower than a year ago for the second straight month. The FHA share of applications reached its highest share in the survey, accounting for almost a third of applications. The average loan size declined, indicating that first-time homebuyers remain active in the new home purchase market.

MBA’s estimate of seasonally adjusted new-home sales increased for the second consecutive month to its highest pace in three months.”