Leena Robinson

Mortgage applications for new-home purchases increased 19.1% compared with one year ago, according to Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for January. Applications increased by 38% compared with December. This change does not include any adjustment for typical seasonal patterns.

“Applications for new-home purchases were strong in January, as newly built homes remained an attractive option for prospective home buyers who looked to take advantage of lower mortgage rates during the month,” says Joel Kan, MBA’s vice president and deputy chief economist.

“Applications were up 19% from a year ago—the 12th consecutive annual increase—and the nonseasonally adjusted index was the strongest January reading in the survey’s history. The seasonally adjusted annualized pace of new-home sales was 700,000 units, the highest sales pace since October 2023.”

In January, MBA estimates new single-family home sales—which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report—were running at a seasonally adjusted annual rate of 700,000 units. The new-home sales estimate is derived using mortgage application information from the BAS, assumptions regarding market coverage, and other factors.

Compared with the December pace of 599,000 units, the seasonally adjusted estimate for January is an increase of 16.9%. On an unadjusted basis, MBA estimates there were 63,000 new-home sales in January, an increase of 37% from 46,000 new-home sales in December.

Conventional loans composed 64.5% of loan applications; FHA loans, 24.8%; RHS/USDA loans, 0.4%; and VA loans, 10.3%. For new homes, the average loan size fell from $405,368 in December to $401,282 in January.

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