The Mortgage Bankers Association (MBA) Builder Applications Survey (BAS) data for December 2017 shows mortgage applications for new home purchases increased 7.8 percent compared to December 2016. Compared to November 2017, applications decreased by 18 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.

"After playing catch-up for 2 months following the slowdown caused by hurricanes Harvey, Irma and Maria, mortgage applications for new homes declined in December to a more normal growth rate of 7.8% on a year over year basis," said Lynn Fisher, MBA Vice President of Research and Economics. "Looking at all of 2017, applications increased by 7.1 percent compared to 2016. Based on December applications, we forecast that new home sales fell in December but remained nearly 16 percent higher than a year ago, and we are anticipating only modest year over year growth for new home sales in 2018. Despite robust demand, a lack of labor and land will continue to constrain homebuilders."

By product type, conventional loans composed 72.5 percent of loan applications, FHA loans composed 15.1 percent, RHS/USDA loans composed 2.3 percent and VA loans composed 10.1 percent. The average loan size of new homes increased from $337,427 in November to $339,203 in December.

The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 554,000 units in December 2017, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for December is a decrease of 16.4 percent from the November pace of 663,000 units. On an unadjusted basis, the MBA estimates that there were 40,000 new home sales in December 2017, a decrease of 14.9 percent from 47,000 new home sales in November.

MBA's Builder Applications Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.