Demand for new homes remained strong as the spring housing market opened up.
Mortgage applications for purchasing new homes increased 7% year-over-year and 19% month-over-month according to data from the Mortgage Bankers Association’s Builder Application Survey (BAS). The figures are not seasonally adjusted.
"With a strong job market, rising wages and lower mortgage rates, housing demand remains strong, as shown by the solid 7% growth in new home purchase applications in March," said Mike Fratantoni, MBA Senior Vice President and Chief Economist. "The confluence of declining mortgage rates with the spring buying season is supporting stronger housing demand and activity. Additionally, the drop in average loan size suggests that builders are tilting production to lower-priced homes, which continues to see the tightest inventories and strongest home-price growth."
Conventional loans took a 68.7% share of loan applications, FHA loans 18.8%, RHS/USDA loans 0.5%, and VA loans 12%.
The average loan size of new homes decreased from $340,692 in February to $331,794 in March.
Estimated new home sales
The Mortgage Bankers Association’s estimate of new single-family home sales for March is a seasonally adjusted annual rate of 676,000 units in, based on mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for March is a decrease of 2% from the February pace of 690,000 units. On an unadjusted basis, MBA estimates that there were 66,000 new home sales in March 2019, an increase of 11.9% from 59,000 new home sales in February.
More market update: