January New Home Purchase Mortgage Applications Decreased 6%
(Image courtesy of MBA)
The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for January 2025 shows mortgage applications for new home purchases decreased 6% compared with a year ago. Compared to December 2024, applications increased by 19%. This change does not include any adjustment for typical seasonal patterns.
“Applications to purchase newly constructed homes rebounded 19% from December, but decreased from a year ago, the first annual decline in two years,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “At an estimated annualized pace of 616,000 units, the new home market was subdued to start the year.”
Added Kan, “The FHA share of new home financing continued to increase, accounting for a little more than 30 percent of applications, the highest share in the history of the survey. This increase is another silver lining in new home purchase activity, as a large proportion of FHA purchase loans go to first-time homebuyers.”
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, is that new single-family home sales were running at a seasonally adjusted annual rate of 616,000 units in January 2025. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for January is an increase of 2.5% from the December pace of 601,000 units. On an unadjusted basis, MBA estimates that there were 56,000 new home sales in January 2025, an increase of 21.7% from 46,000 new home sales in December.
By product type, conventional loans composed 57.8% of loan applications, FHA loans composed 30.2%, RHS/USDA loans composed 0.5% and VA loans composed 11.4%. The average loan size for new homes increased from $400,930 in December to $403,416 in January.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.
For additional information on MBA’s Builder Applications Survey, please click here.
