The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for September 2021 shows mortgage applications for new home purchases decreased 16.2 percent compared from a year ago. Compared to August 2021, applications decreased by 4 percent. This change does not include any adjustment for typical seasonal patterns.
“New home sales purchase activity was weaker in September, and the average loan size rose to another record high, as homebuilders continue to grapple with rising building materials costs and labor shortages. The survey-high average loan size of $408,522 is evidence of higher sales prices from these higher costs, as well as the shift in new construction to larger, more expensive homes,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The estimated pace of new home sales decreased 3.5% last month after a strong August reading, but the two-month sales pace is at its strongest since January 2021.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 843,000 units in September 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 September is a decrease of 3.5 percent from the August pace of 874,000 units. On an unadjusted basis, MBA estimates that there were 66,000 new home sales in September 2021, a decrease of 7 percent from 71,000 new home sales in August.
By product type, conventional loans composed 75.1 percent of loan applications, FHA loans composed 13.9 percent, RHS/USDA loans composed 0.5 percent and VA loans composed 10.5 percent. The average loan size of new homes increased from $406,922 in August to $408,522 in September.
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.
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