New Home Mortgage Applications in U.S. Spike 20.1 Percent Annually in May

Based on the Mortgage Bankers Association's latest Builder Application Survey for May 2019, U.S. mortgage applications for new home purchases increased 20.1 percent compared from a year ago. Compared to April 2019, applications increased by 0.1 percent. This change does not include any adjustment for typical seasonal patterns. "Purchase activity strengthened in May, with new home mortgage applications and our estimate of new home sales both showing increases compared to a year ago, at 20 percent and 15 percent, respectively," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The average loan size for new home applications decreased almost 3 percent, signaling the ongoing moderation in home prices and a shift to building lower-priced homes. Declining mortgage rates and more new entry-level supply are good news for the housing market this summer." MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 727,000 units in May 2019, 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.