October mortgage applications for new-home purchases increased 3% from September and jumped 8.2% year over year, according to the Mortgage Bankers Association (MBA).

MBA estimates that new single-family home sales were at a seasonally adjusted annual rate of 747,000 units in October, an increase of nearly 10% from the September pace of 680,000 units. Conventional loans accounted for 60.8% of applications, Federal Housing Administration (FHA) loans made up 28.7%, Veterans Administration loans were 10.1% and Rural Housing Service-U.S. Department of Agriculture loans accounted for 0.4%.

Joel Kan, MBA’s vice president and deputy chief economist, said new home purchase activity picked up in October, even as stronger economic data and election uncertainty pushed mortgage rates higher during the month. Both new applications and estimated home sales were higher compared to last year’s levels.

“New homes are an attractive alternative for many buyers as existing inventory is still tight in many markets around the country and a newly constructed home provides additional customization options,” Kan said. “The average loan size picked up to almost $410,000, the highest in the survey since August 2022. However, the FHA share remains elevated at almost 29%, driven by a high share of first-time home buyers still active in this segment of the market.”