The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for May 2020 shows mortgage applications for new home purchases increased 10.9 percent compared from a year ago. Compared to April 2020, applications increased by 26 percent. This change does not include any adjustment for typical seasonal patterns.

"The solid increase in new home purchase applications in May is another indication of a recovery in the housing market. MBA estimates that new home sales rebounded 26 percent last month - a healthy turnaround after three months of declines," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Homebuyer traffic is rising, and homebuilders are continuing to ramp up production following the COVID-19 pandemic-related restrictions. We expect to see additional near-term strength in the coming months from the resumption of delayed sales activity caused by the social distancing and stay-at-home orders during March and April."

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 672,000 units in May 2020, 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 May is an increase of 26.1 percent from the April pace of 533,000 units. On an unadjusted basis, MBA estimates that there were 65,000 new home sales in May 2020, an increase of 27.5 percent from 51,000 new home sales in April.

By product type, conventional loans composed 62.5 percent of loan applications, FHA loans composed 24.5 percent, RHS/USDA loans composed 1.2 percent and VA loans composed 11.8 percent. The average loan size of new homes decreased from $334,641 in April to $332,793 in May.

MBA's Builder Application 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.