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New Home Purchase Applications Dip by 8 Percent in May

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home_purchase_applicationMortgage applications in May 2014 decreased by 8 percent from April, according to recent information released by the Mortgage Bankers Association (MBA) Builder Application Survey. This change does not include any adjustment for typical seasonal patterns.

The MBA estimate of new single-family home sales were running at a seasonally adjusted annual rate of 374,000 units in May 2014, 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 May is a decrease of 10.7 percent from the April pace of 419,000 units.  On an unadjusted basis, the MBA estimates that there were 36,000 new home sales in May 2014, a decrease of 14.3 percent from 42,000 in April.

By product type, conventional loans composed 69.3 percent of loan applications, FHA loans composed 15.5 percent, RHS/USDA loans composed 1.7 percent and VA loans composed 13.6 percent. The average loan size of new homes decreased from $299,094 in April to $296,427 in May.

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.

For more information, visit www.mba.org.

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