Mortgage applications for new home purchases are significantly rising, according to the Mortgage Bankers Association Builder Application Survey data for March 2017. This is welcome news for homebuyers given the extreme shortage of housing inventory available.

The survey found that mortgage applications for new home purchases increased 6.7% compared to March 2016, and up 23% from February 2017.

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. As a result, the MBA, along with using data from other sources, is able to provide an early estimate of new home sales volumes at the national, state, and metro level.

Broken up by product type, conventional loans composed 67.5% of loan applications, FHA loans composed 18.6%, RHS/USDA loans composed 1% and VA loans composed 12.8%.

The average loan size of new homes decreased from $330,208 in February to $328,192 in March.

Lynn Fisher, MBA’s vice president of research and economics, stated, “Mortgage applications for new homes accelerated in March, with the Builder Application Survey Index reaching its highest point since the series began in August 2012.”

The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 670,000 units in March 2017.

Additionally, the seasonally adjusted estimate for March is an increase of 14.3% from the February pace of 586,000 units.

“The pick up from a fairly modest February showing suggests that developers are finding ways to bring new product on line to help supplement otherwise low inventories of existing homes for sale in the U.S.,” she continued. “In contrast to the increasing trend in average loan size in our Weekly Application Survey which reports on applications for both new and existing homes, the average loan size for new homes in March from the Builder survey was unchanged from a year ago.”

She also noted that looking at the full distribution of applications, nearly two-thirds of applications for new homes in the survey have loan sizes between $200,000 and $400,000.