Purchase mortgage applications for newly constructed homes showed strong monthly gains in January amid moderate year-over-year improvement, data released Thursday by the Mortgage Bankers Association (MBA) indicates.
Not accounting for seasonal factors, new-home purchase applications were 2% higher over the year in January and 19% higher than December levels.
“This increase was consistent with single-family housing starts finishing 2025 at a stronger pace even as permitting stayed relatively flat,” commented Joel Kan, deputy chief economist of the MBA, in a statement accompanying the data.
Shutdown-delayed government statistics published Wednesday show single-family housing starts rose 4.1% from November to December but remained 9% lower than year-ago levels. Permits declined 1.7% monthly and were nearly 11% lower than year-ago levels.
On a full-year basis, single-family construction slowed measurably in 2025 from 2024, with starts dropping 6.9% during the year, permits decreasing by 7.4% and completions of single-family homes sliding 0.8%.
After the MBA reported a 15% monthly decline in the annual pace of new-home sales to 640,000 units, the association observed a seasonally adjusted rebound of 3.6% to 663,000, with approximately 58,000 new-home sales in January compared to 50,000 in December.
MBA derives these estimates, in advance of official government statistics, using mortgage application data from its Builder Application Survey, “as well as assumptions regarding market coverage and other factors.”
Kan attributed the slight recovery to builders’ continued use of concessions and wider utilization of adjustable-rate mortgage (ARM) loans. Official figures on new-home sales in November and December are set to be published by the U.S. Census Bureau on Friday.
The National Association of Home Builders reported on Monday that home builders’ six-month sales outlook had deteriorated in January, due to persistent purchase affordability barriers, though fewer builders reported the use of price reductions in sales last month.
Complementing fewer price cuts, the MBA reported that the average loan size on new-home purchase mortgage applications was $385,506 in January, the highest in 11 months. Conventional loans that satisfy the underwriting requirements of Fannie Mae and Freddie Mac accounted for nearly 49% of new-home loan applications last month.
Meanwhile, government mortgages insured by the Federal Housing Administration made up about 35%, level with their December share but down from a recent peak of 37% in November, while loans backed by the Department of Veterans Affairs comprised 14.8%.
