According to the Mortgage Bankers Association's Builder Application Survey for April 2016, U.S. mortgage applications for new home purchases decreased by 11 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.
"The index decline in April is more than likely a result of both February and March seeing a strong surge in applications for new homes and the index not being seasonally adjusted," said Lynn Fisher, MBA's Vice President of Research and Economics. "In fact, last year peak applications occurred in March."
By product type, conventional loans composed 67.8 percent of loan applications, FHA loans composed 18.3 percent, RHS/USDA loans composed 0.6 percent and VA loans composed 13.3 percent. The average loan size of new homes decreased from $328,898 in March to $325,233 in April.
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 503,000 units in April 2016, 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 April is a decrease of 12.4 percent from the March pace of 574,000 units. On an unadjusted basis, MBA estimates that there were 48,000 new home sales in April 2016, a decrease of 11.1 percent from 54,000 new home sales in March.