Applications for mortgages for new home purchases increased by 14% in March compared with February and were up 5.5% compared with March 2024, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
The increase fit seasonal patterns and was spurred by lower mortgage rates that came during February and March.
“Applications for new home purchases increased in March, consistent with typical seasonal patterns and supported by mortgage rates that had been drifting lower,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The growing inventory of newly built, move-in ready homes supported homebuyer interest over the month, pushing the index higher than last year’s levels. Our estimate of seasonally adjusted new home sales saw a slight decline in March but were stronger than last year’s pace of sales.”
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 629,000 units in March – a decrease of 0.8% compared with February.
On an unadjusted basis, the MBA estimates that there were 61,000 new home sales in March 2025, an increase of 7% from 57,000 new home sales in February.
By product type, conventional loans composed 49.0% of loan applications, FHA loans composed 37.0%, RHS/USDA loans composed 0.9% and VA loans composed 13%.
The average loan size for a new home in March was $381,921, down from $397,516 in February.
Photo: Amanda Smith