Sales of newly constructed homes ticked up 7 percent in September when compared on a non-seasonally adjusted basis to August according to the Mortgage Bankers Associations (MBAs) Builder Application Survey (BAS).  MBA said sales were 3 percent higher than in September 2015.

MBA issues a monthly estimate of new home sales based on the BAS which is conducted with the mortgage subsidiaries of major home builders.  Official new home estimates come from the U.S. Census Bureau and the Department of Housing and Urban Development.  Those numbers for September will be released on October 24.

Lynn Fisher, MBA’s Vice President of Research and Economics said, “After a strong start in 2016 and despite evidence of increasing costs, mortgage applications for new homes have maintained a pace modestly above 2015 rates.  The monthly decline in mortgage applications in September is largely attributable to typical declinesin building activity this time of year. That said, builders are facing headwinds from rising labor costs.  Looking forward, year over year growth in applications is likely to remain muted for the balance of 2016.”

On a seasonally adjusted basis MBA estimates that September new home sales were at an annual rate of593,000 units in September.  This is a decrease of 1.3 percent from August when sales were estimated at a rate of 601,000 units. On an unadjusted basis, the MBA estimates that there were 44,000 new home sales in September 2016, a decrease of 8.3 percent from 48,000 sales in August. Their estimates are derived using assumptions about market coverage in addition to application information from the BAS.

Conventional loans had a 68.8 percent share of new home purchase applications in September and FHA got 17.5 percent.  The VA share was 12.7 percent and RHS/USDA’s was 0.9 percent. The average loan size of new homes increased from $325,224 in August to $326,998 in September.

MBA had estimated that August sales would rise 11.3 percent on a seasonally adjusted basis compared to July and up 14.0 percent year-over-year.  Official figures put sales down by 7.6 percent from the previous month but 20.6 percent higher than in August 2015.