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MBA Says Buyers Will Return by Summer as Lockdown Ends
Friday, May 15, 2020
The Mortgage Bankers Association (MBA) says applications
for financing new home purchases were down 25 percent in April compared to
March and by 12 percent year-over-year. This data from MBA's Builder Application
Survey (BAS) does not include any adjustment for typical seasonal patterns. "New home purchase applications severely weakened in April, which
coincided with the peak of the social distancing efforts and restrictions on
non-essential activities to help slow the spread of COVID-19," according to Joel
Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "During
what's typically the prime home buying season, activity fell 25 percent from
March and decreased 12 percent from a year ago," he said. "MBA
estimates that new home sales dropped to an annualized pace of 533,000 units -
the slowest since December 2016. This decline was in line with data from our
Weekly Applications Survey, which indicated a pullback in March and most of
April." The seasonally adjusted sales estimate for March was 697,000 units. On an
unadjusted basis, MBA estimates that there were 51,000 new home sales in April
2020, a decrease of 28.2 percent from 71,000 new home sales in March. The new
home sales estimate is derived using mortgage application information from the
BAS, as well as assumptions regarding market coverage and other factors.
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