Although the Mortgage Bankers Association (MBA) touted a spike in mortgage applications in the last week, the association is also noting a decrease in applications for new-home purchases in the last month.
Applications for new homes decreased by 9 percent in May compared to April, MBA said in its release of the monthly Builder Application Survey. On an unadjusted basis, the MBA estimates that there were 45,000 new-home sales in May 2015, a decrease of 6.3 percent from 48,000 new-home sales in April.
The seasonally adjusted estimate for May is a decrease of 5.7 percent from the April pace of 487,000 units, MBA said.
“Mortgage applications to homebuilders declined in May following an improved start to the year. Consistent with the intent to complete new homes in time for the school year, applications fell at a similar rate between April and May last year.
That said, application volume is 15 percent ahead of the same month last year,” said Lynn Fisher, MBA’s vice president of research and economics.
By product type, conventional loans comprised 67.4 percent of loan applications, FHA loans comprised 19.1 percent, Rural Housing Service/USDA loans comprised 1.2 percent, and VA loans comprised 12.3 percent.
The average loan size of new homes increased from $315,670 in April to $320,744 in May, according to MBA’s survey.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of homebuilders across the country.