Estimates published Tuesday by the Mortgage Bankers Association (MBA) show purchase mortgage applications for newly built homes dipped sharply last month.
The MBA’s Builder Application Survey declined 7% in November from the previous month but remained 3.1% higher than a year ago.
Mike Fratantoni, chief economist at the MBA, noted in a press release that 37% of financed new-home purchases in November used Federal Housing Administration (FHA) loans, while 24% were bought with adjustable-rate mortgages.
FHA-insured loans comprised 35.1% of new-home purchase mortgages in October and 33.8% in September, while ARMs carried a 25% share last month.
“New homebuyers continue to look for ways to extend their purchasing power or lower monthly payments,” said Fratantoni.
Getting a clear read on sales conditions for newly built homes has been challenging in recent months, however.
The U.S. Census Bureau publishes new-home sales data monthly, but figures for September, October and November are still missing due to the 43-day U.S. government shutdown that began on Oct. 1 and concluded Nov. 12.
Pre-shutdown census data indicated that new-home sales spiked 20% in August to an annual sales pace of 800,000 units, up from a July pace of 664,000 units.
Over the course of 2025, new-home builders have reported increased use of sales incentives to attract cautious, affordability-constrained homebuyers.
More than 40% of home builders reported cutting prices in November — a record high in the post-pandemic era — according to a monthly sentiment survey conducted by the National Association of Home Builders (NAHB) and Wells Fargo.
As a result, builders have slowed the pace at which they are starting new projects, anxious to move standing inventory as home prices soften nationally.
The MBA estimates that 51,000 new homes sold in November, a drop of 7.3% from the estimated 55,000 new homes sold in October. That translates to a seasonally adjusted annual sales pace of 755,000 units last month, reflecting a 2.1% slowdown from the October pace of 771,000 units.
The average loan size for financed new-home purchases shrank from $381,404 in October to $378,063 in November, according to MBA data.
