Mortgage applications for new home purchases in January jumped 19% from a slow December but were still down 6% from a year ago, according to the builder application survey from the Mortgage Bankers Association (MBA).

The application survey comes a day after the MBA announced that weekly mortgage applications decreased 6.6% for the week ending Feb. 14, possibly pointing to the early signs of a slowdown in the mortgage industry.

There were an estimated 56,000 new homes sold in January, an increase of 21.7% from the 46,000 homes sold in December 2024. The MBA estimates that the sales translate to a seasonally adjusted annual rate of 616,000 units in January.  That is an increase of 2.5% from December’s annual pace of 601,000 homes.

Conventional loans accounted for 57.8% of applications, Federal Housing Administration (FHA) loans composed 30.2% and Veterans Administration loans accounted for 11.4%. The average loan size for new homes increased from $400,930 in December to $403,416 in January.

“Applications to purchase newly constructed homes rebounded 19% from December, but decreased from a year ago, the first annual decline in two years,” said Joel Kan, MBA’s vice president and deputy chief economist. “At an estimated annualized pace of 616,000 units, the new home market was subdued to start the year.”

Kan said one silver lining in the data is that the number of FHA loans increased to more than 30% of the total, the highest share in the history of the survey. A large portion of FHA purchase loans go to first-time homebuyers.