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Mortgage applications for newly built homes decreased 6% year over year in January 2025, according to a report released Thursday by the Mortgage Bankers Association (MBA). But application volume increased by 19% from December 2024.
MBA’s Builder Application Survey (BAS) explores mortgage application data on a monthly basis across mortgage subsidiaries of homebuilders. MBA pulls new-home sales estimates directly from the U.S. Census Bureau. This month’s data doesn’t include any seasonal adjustments, the trade group noted.
January’s data changed course from December’s new-home purchase application rate, which was up 8.9% year over year. December’s volume followed on the heels of increased demand in November, when applications were up 7.2% annually.
The average loan size for new-home mortgages increased from $400,930 in December to $403,416 in January, according to MBA’s report.
MBA reported that 56,000 new homes were sold in January 2025 — up 21.7% from the prior month. According to census data, single-family home sales ran at a seasonally adjusted annual rate of 616,000 last month — up from a pace of 601,000 in December.
“Applications to purchase newly constructed homes rebounded 19 percent from December, but decreased from a year ago, the first annual decline in two years,” MBA vice president and deputy chief economist Joel Kan said in a statement. “At an estimated annualized pace of 616,000 units, the new home market was subdued to start the year.”
Kan also pointed out an increase in the share of Federal Housing Administration (FHA) loan applications for new homes as a key driver for more sales. FHA loans now account for more than 30% of new-home applications — the highest share in the history of the BAS.
“This increase is another silver lining in new home purchase activity, as a large proportion of FHA purchase loans go to first-time homebuyers,” Kan added.
Conventional loans led all loan types with the highest share of activity at 57.8%. U.S. Department of Veterans Affairs (VA) loans comprised 11.4% of the total, up from 9.9% in December 2024. U.S. Department of Agriculture (USDA) loan applications remained unchanged from December 2024 at 0.5%.
