Applications for mortgages for new home purchases jumped 19% in January compared with December but were down 6% compared with January 2024, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“Applications to purchase newly constructed homes rebounded 19 percent from December, but decreased from a year ago, the first annual decline in two years,” says Joel Kan, vice president and deputy chief economist, in a statement. “At an estimated annualized pace of 616,000 units, the new home market was subdued to start the year.”
“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,” Kan adds. “This increase is another silver lining in new home purchase activity, as a large proportion of FHA purchase loans go to first-time homebuyers.”
The MBA estimates new single-family home sales were at a seasonally adjusted annual rate of 616,000 units in January – an increase of 2.5% from December.
On an unadjusted basis, and month-over-month, the MBA estimates that there were 56,000 new home sales in January, an increase of 21.7% compared with 46,000 new home sales in December.
By product type, conventional loans composed 57.8% of loan applications for new home sales, FHA loans composed 30.2%, RHS/USDA loans composed 0.5% and VA loans composed 11.4%.
The average loan size for a new home increased to $403,416 in January, up from $400,930 in December.
Photo: Alexander Andrews