New Single-Family Home Sales Spike 35%

A surge in new single-familiy home sales in January appears to be in line with rising builder sentiment in the new home market, according to a recent survey from the Mortgage Bankers Association (MBA).

The sales of new single-family homes were running at a seasonally adjusted annual rate of 543,000 units in January, a 35% increase from December’s pace of 402,000 units, notes MBA’s Builder Applications Survey. 

On an unadjusted basis, MBA estimates there were 38,000 new home sales in January 2014, a 36% growth from the 28,000 units in the prior month.

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While the monthly jump might appear to conflict with other data, such as MBA’s purchase application index and existing home sales data from the National Association of Realtors, the Builder Application Survey is consistent with reports of homebuilder sentiment showing strength in the market for new homes, said MBA Chief Economist Mike Fratantoni in a statement.

“It is also worth noting that the significant January increase also followed a particularly slow pace of sales in November and December,” Fratantoni said. 

MBA derives its new home sales estimate using mortgage application information from the Builder Application Survey, as well as assumption regarding market coverage and other factors.

In January, mortgage applications for new home purchases increased by 27% compared to December 2013. 

Of these mortgages, 69.4% were conventional loans, 15.9% were Federal Housing Administration loans, 13.4% were VA loans and 1.3% were RHD/USDA loans. 

In terms of loan size, the average amount decreased from $300,444 in December to $289,358 in January.

Written by Jason Oliva

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