New home purchases up sharply in Jan. 2014

Posted by Julian Yates on Friday, February 14th, 2014 at 5:56pm.

WASHINGTON – Feb. 14, 2014 – The Mortgage Bankers Association (MBA) estimates that sales of new single-family homes were running at a seasonally adjusted annual rate of 543,000 units in January 2014, based on data from MBA’s Builder Applications Survey (BAS).

The estimated 543,000 unit annual sales pace in January was a 35 percent increase from December’s pace. On an unadjusted basis, the MBA estimated 38,000 new home sales in January – a 36 percent increase from the level of 28,000 units in December. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

“While the big jump may appear to conflict with other data, such as MBA’s purchase application index and NAR’s existing home sales data that point to a weak market for existing homes, our Builder Application Survey estimate is consistent with reports of homebuilder sentiment that show strength in the market for new homes,” says Mike Fratantoni, MBA’s chief economist. “It is also worth noting that the significant January increase also followed a particularly slow pace of sales in November and December.”

Mortgage applications for new home purchases increased by 27 percent relative to the previous month. That change doesn’t include any adjustment for typical seasonal patterns.

By product type, conventional loans composed 69.4 percent of loan applications; FHA loans composed 15.9 percent; RHS/USDA loans composed 1.3 percent; and VA loans composed 13.4 percent. The average loan size of new homes decreased from $300,444 in December to $289,358 in January.

© 2014 Florida Realtors®

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Sarasota Area Real Estate Specialist

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