The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for May 2019 shows mortgage applications for new home purchases increased 20.1 percent compared from a year ago. Compared to April 2019, applications increased by 0.1 percent. This change does not include any adjustment for typical seasonal patterns.

"Purchase activity strengthened in May, with new home mortgage applications and our estimate of new home sales both showing increases compared to a year ago, at 20 percent and 15 percent, respectively," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The average loan size for new home applications decreased almost 3 percent, signaling the ongoing moderation in home prices and a shift to building lower-priced homes. Declining mortgage rates and more new entry-level supply are good news for the housing market this summer."

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 727,000 units in May 2019, 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 0.7 percent from the April pace of 722,000 units. On an unadjusted basis, MBA estimates that there were 69,000 new home sales in May 2019, unchanged from April.

By product type, conventional loans composed 69.4 percent of loan applications, FHA loans composed 17.9 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 12 percent. The average loan size of new homes decreased from $338,745 in April to $330,311 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.