Although we will not see data on new home sales until later this Spring, the Mortgage Bankers Association (MBA) is forecasting a considerable increase in new home sales in Quarter 1 of 2018. The MBA makes their analysis based on the responses from its Builder Application survey. They estimated an increase of 18.4% compared to January of 2017.
Using the application volume and various other market data, MBA has estimated sales for new homes were at a seasonally adjusted annual rate of 700,000, a huge gain compared to December’s pace of 554,000. Unadjusted, the gain is approximately 35%.
The MBA Vice President of Research and Economics Lynn Fisher says that this growth “complements other positive news on U.S. job growth suggesting that economic fundamentals are going strong”. These estimates for Quarter 1 in 2018 is the highest since 2013, when the survey began.
The information from the survey also gives an outlook into what type of loans were used by new home buyers. Conventional loans accounted for 71% of applications, FHA loan products were 15%, and the VA loans made up approximately 12%.
The real question is how the impact of rising interest rates will counteract this trend. We will contribute more to this topic throughout the year. For mortgage information or questions, please reach out to us at # (760) 930-0569….we would love to hear from you.