March New Home Purchase Mortgage Applications Increased 0.6 Percent

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for March 2023 shows mortgage applications for new home purchases increased 0.6 percent compared from a year ago. Compared to February 2023, applications increased by 10 percent. This change does not include any adjustment for typical seasonal patterns.

“Mortgage applications for new home purchases increased in March. Low for-sale inventory continues to constrain sales, along with mortgage rates that remain above 6 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “MBA’s estimate for new home sales was down three percent from the previous month. New home sales will be key to the housing market recovery in 2023 as they account for an increasing share of purchase activity as home builders maintain construction levels and offer concessions for buyers. On the other hand, existing home inventory remains low as many current homeowners are locked-in to their homes with a lower mortgage rate.”

MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 666,000 units in March 2023, based on data from the BAS. The new home sales estimate is derived using 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 3.2 percent from the February pace of 688,000 units. On an unadjusted basis, MBA estimates that there were 65,000 new home sales in March 2023, an increase of 6.6 percent from 61,000 new home sales in February. 

By product type, conventional loans composed 66.4 percent of loan applications, FHA loans composed 22.6 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 10.7 percent. The average loan size of new homes increased from $406,953 in February to $407,015 in March.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.