Demand for mortgage applications can be a good indicator of future home sales numbers. After all, most buyers require a mortgage to finance their home purchase. So it makes sense that increasing demand for loan applications would coincide with an eventual increase in closed sales. That’s why a new report from the Mortgage Bankers Association is an indication that new home sales are about to heat up. The report found application demand for new home purchases rose nearly 14 percent in May from year-before levels. Joel Kan, MBA’s vice president and deputy chief economist, says fewer existing homes has driven buyers to consider buying new. “With existing-home inventory still lagging in many markets, many home buyers have turned their interest toward newly built homes, particularly FHA borrowers,” Kan said. Application demand for new home purchases also improved on a month-over-month bases in May, rising 1 percent from April. (source)
