New home purchase applications failed to keep the upward trend witnessed the past two months, instead falling by 11%, the latest Builder Application Survey from the Mortgage Bankers Association found.
“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.”
The MBA noted that this change does not include any adjustment for typical seasonal patterns. MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of homebuilders across the country.
Broken up by product type, conventional loans composed 67.8% of loan applications, FHA loans composed 18.3%, RHS/USDA loans composed 0.6% and VA loans composed 13.3%.
The average loan size of new homes declined, falling from $328,898 in March to $325,233 in April.
Furthermore, the MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 503,000 units in April 2016.
The seasonally adjusted estimate for April is a drop of 12.4% from the March pace of 574,000 units. But on an unadjusted basis, the MBA estimates that there were 48,000 new home sales in April 2016, a decrease of 11.1% from 54,000 new home sales in March.