The Mortgage Bankers Association’s Builder Application Survey showed a significant annual increase in mortgage applications for new home purchases last month.
Applications went up 25.9% year over year on an unadjusted basis, but down 1% month over month.
"Despite a monthly decrease in February new applications and estimated new home sales, the year-over-year trends were strong, with new applications increasing 26%, and our estimate of new home sales increasing 8%," said Joel Kan, associate vice president of economic and industry forecasting at MBA.
MBA estimated new single-family home sales grew at a seasonally adjusted year-over-year rate of 746,000 in February. However, this annual estimate for February was down 13.8% from the 865,000 pace in January. Unadjusted, there were 64,000 new home sales last month, down 3% from 66,000 the prior month.
Conventional loans made up 69.3% of all loan applications, while FHA loans composed 18.5%, RHS/USDA loans composed 0.8%, and VA loans composed 11.4%. The average loan size of new homes shrank from $346,140 to $340,169 month over month.
"Looking ahead, there is significant uncertainty regarding how the coronavirus epidemic will impact the housing market, and some of January's record-level activity could have been attributed to the warmer winter weather, lower mortgage rates, and the tight inventory of existing homes on the market — especially in lower price tiers,” Kan said