The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for March 2021 shows mortgage applications for new home purchases increased 7 percent compared from a year ago. Compared to February 2021, applications increased by 12 percent. This change does not include any adjustment for typical seasonal patterns.
“New home purchase application activity is typically strong in March, and this year did not disappoint. Applications strongly increased on a monthly and annual basis,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “However, MBA’s estimate of new home sales declined by more than 4 percent last month, as we continue to see increasing home prices and a low number of homes on the market, caused in part by increased challenges facing homebuilders. Supply chain delays have led to more expensive building materials and delayed deliveries, and these have made it more difficult for builders to keep up with the strong demand for buying a home seen in most of the country this spring.”
Added Kan, “With home-price appreciation remaining elevated in many markets, the average loan size for a new home purchase reached $374,000 in March, the highest in our survey.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 714,000 units in March 2021, 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 4.5 percent from the February pace of 748,000 units. On an unadjusted basis, MBA estimates that there were 72,000 new home sales in March 2021, an increase of 10.8 percent from 65,000 new home sales in February.
By product type, conventional loans composed 70.9 percent of loan applications, FHA loans composed 14.8 percent, RHS/USDA loans composed 4.4 percent and VA loans composed 9.9 percent. The average loan size of new homes increased from $370,679 in February to $374,353 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.