Mortgage Applications for New-Home Purchases Soar in January

On Friday, the Mortgage Bankers Association (MBA) reported that data from its January Builder Application Survey reveals that mortgage applications for new-home purchases increased 38.0% month-over-month and were up 19.1% year-over-year. This change does not include any adjustments for typical seasonal patterns.

According to the MBA, the seasonally adjusted estimate for January increased 16.9% from December’s pace of 599,000 units. On an unadjusted basis, the MBA estimates that there were 63,000 new-home sales in January, an increase of 37% from 46,000 in December.

By loan product type, conventional loans comprised 64.5% of loan applications in January. FHA loans comprised 24.8%, RHS/USDA loans 0.4%, and VA loans 10.3%. The average loan size for a new home increased from $405,368 in December to $401,282 in January.

In remarks accompanying the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Applications for new home purchases were strong in January, as newly built homes remained an attractive option for prospective homebuyers who looked to take advantage of lower mortgage rates during the month. Applications were up 19% from a year ago—the 12th consecutive annual increase—and the non-seasonally 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.”