The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for August 2020 shows mortgage applications for new home purchases increased some 33 percent compared to a year ago. However, when stacked against July 202o numbers, applications decreased by 4 percent. This change does not include any adjustment for typical seasonal patterns.
“The housing market continued to exceed expectations in August, as housing demand for new homes stayed strong and the job market continued to recover,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite economic uncertainty and the pandemic’s distortion to typical seasonal patterns, the comparisons to August 2019 show strength. Purchase applications increased over 33 percent, and MBA’s estimate of new home sales were up over 11 percent. The seasonally adjusted annualized rate of sales was 871,000 units in August, the second strongest of the year and well above the 785,000 units sold a year ago.”
Conventional loans composed 69.1 percent of loan applications, FHA loans composed 19.2 percent, RHS/USDA loans composed 1.1 percent and VA loans composed 10.5 percent. The average loan size of new homes increased from $345,929 in July to $348,576 in August.