The Mortgage Bankers Association (MBA) is predicting a
slowdown in new home sales
when the Census Bureau releases its statistics next
week. MBA’s Builder
Application Survey (BAS) data for February 2021 shows mortgage applications for
new home purchases increased 9.2 percent compared to a year ago but were down by
9 percent year-over-year.
This change does not include any adjustment for
typical seasonal patterns.

Based
on these applications and other data, MBA estimates that new single-family homes
were selling at a seasonally adjusted annual rate of 748,000 units in February.
This is a decline of 17.3 percent from the January pace of 905,000
units.  On an unadjusted basis, MBA estimates the month’s sales numbered
65,000 units, a 5.8 percent decrease from 69,000 the prior month. 

“The economy and job market continue to improve,
but new home sales activity slowed in February. Builders continue to be
confronted with rising input costs and a lack of available lots
, causing them
to slow production,” said Joel Kan, MBA’s Associate Vice President of Economic
and Industry Forecasting. “Applications for new home purchase mortgages
decreased last month but remained over 9 percent higher than a year ago, and MBA’s
estimate of new home sales, at 748,000 units, was at its slowest annual pace
since May 2020. After seven consecutive months of a strong 800,000-plus-unit
sales pace, supply and demand imbalances are likely creating bottlenecks.”

Added Kan, “The average loan size rose to a
record high of over $370,000, and the conventional share of applications also
hit a new high, as overall housing inventory levels remain extremely low and
are pushing home prices higher
.” 

Seventy-four percent of applications were for
conventional loans and 15.4 percent for FHA loans. VA and RHS/UDA applications accounted
for 9 percent and 1.5 percent, respectively. The average loan size of new homes
increased from $363,493 in January to $370,679 in February.

MBA’s Builder Application Survey tracks
application volume from mortgage subsidiaries of new home builders across the
country.  This enables MBA to provide an early estimate of new home
sales volumes at the national, state, and metro level and the types of loans
used to buy them. Official new home sales estimates are conducted monthly by
the Census Bureau at contract signing, which is typically coincident with the
mortgage application. The next Census Bureau report will be issued on March
23.

By Jann Swanson , dated 2021-03-18 13:27:34

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Courtesy of Mortgage News Daily

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