Purchase mortgage applications for newly constructed homes weakened in February, reversing strong demand from the prior month, according to figures published Thursday by the Mortgage Bankers Association (MBA).
After posting respective monthly and annual increases of 19% and 2% in January, new-home application volumes declined 1% over the month to land just 0.9% ahead of last year’s February pace. The totals do not include any seasonal adjustments.
Buyers remained cautious despite easing mortgage rates, the abundance of new-home inventory and average loan sizes for new-home purchase mortgages declining over the month.
“Macroeconomic uncertainty likely played a role in this sluggishness, especially given the weakening job market,” noted Joel Kan, deputy chief economist at the MBA, in commentary accompanying Thursday’s data release. Kan said new-home applications and sales declined from January levels, though official February sales totals have not been reported.
New-home sales were higher in February than a year ago, however, according to MBA calculations using data from its Builder Application Survey, which tracks new-home purchase application volumes from mortgage subsidiaries of home builders, as well as data from other sources to project new-home sales totals ahead of government reporting.
Conventional loans constituted slightly more than 49% of new-home loan applications, the MBA reported, while applications for loans insured by the Federal Housing Administration and Department of Veterans Affairs made up around 35% and 14% of demand, respectively.
MBA estimates that new single-family homes sold at an annual rate of 641,000 units in February, a decline of 3.3% from its estimated pace of 663,000 units in January. However, official figures released this week by the U.S. Census Bureau and Department of Housing and Urban Development (HUD) show new-home sales plunged more than 17% from December levels in January, to an annual pace of 587,000 units as winter storms impacted activity.
“Official new home sales estimates are conducted by the Census Bureau on a monthly basis,” the MBA explained. “In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.”
On an unadjusted basis, MBA estimates that 57,000 new homes sold in February, a drop of 1.7% from the 58,000 sold in January. Census Bureau and HUD reporting shows closer to 48,000 newly built homes sold in January.
“More housing inventory has broadly supported some of the growth in homebuying patterns in recent months,” said Kan, adding the caveat, “with much of the available inventory in Sun Belt states, demand in many of those markets might be slowing, even with easing home-price growth.”
Regional disparities show an uneven inventory recovery following the pandemic-era homebuying boom, as numerous metro markets across the South and West have surpassed pre-pandemic inventory levels, but metros in the Northeast and Midwest still lag their historical norms, supporting home prices and tight buyer’s markets.
At the end of 2025, the number of active listings nationwide dipped below the 1 million mark for the first time since last April, with national inventory still 12.5% below typical 2017 to 2019 levels, according to listings platform Realtor.com.
