As we head into prime time home buying season, the existing home sales market is on fire and the demand for new single-family homes continues to heat up at an alarming rate.
A new May 2017 report by the Mortgage Banker’s Association (MBA) shows mortgage applications for new home purchases were up big time by 15% when compared to May 2016. Applications had risen by 4% from the previous month. These numbers do not include any adjustment for normal seasonal patterns.
Conventional mortgage applications led the charge with 69.2% of the total loan applications; followed by FHA loans with a 17.5% share and VA loans with 12.2%. RHS/USDA loans had a 1.1% share of total loan apps.
The average loan size was down from a revised $329,244 in April to $324,844 in May.
The MBA said that it estimates new single-family home sales were running at a seasonally adjusted annual rate of 605,000 units in May 2017. The seasonally adjusted estimate for May is an increase of 8.6 percent from the revised April pace of 557,000 units. On an unadjusted basis, the MBA estimates that there were 57,000 new home sales in May 2017, an increase of 5.6% from the revised pace of 54,000 new home sales in April.
Lynn Fisher, MBA’s Vice President of Research and Economics had said;
“Following a decline in April, applications for new homes slightly rebounded month-over-month in May, setting up a 15 percent year over year increase relative to May of 2016. While March has signaled the peak in applications for new homes for the last two years, we may see more sustained activity throughout the balance of this year as demand for new homes continues to increase and strong house price growth continues to motivate homebuilding.”