New home mortgage purchase applications in November fell 12% from the previous month, but remained 7.2% higher than one year ago, according to a report from the Mortgage Bankers Association (MBA).

New single-family home sales were running at a seasonally adjusted annual rate of 713,000 in November, down from the annual rate of 747,000 homes in October. However, the November figure was still well above the September pace of 680,000 homes. The MBA estimates that there were 49,000 new homes sold in November, 12.5% below October’s sales figure of 56,000.

This roller coaster ride in sales reflects seasonal changes, but fluctuating mortgage rates may have played a part. Rates rose through October and into November, before peaking at an average rate of 6.84% for the week of Nov. 21, according to Freddie Mac.

Conventional loans made up 61.6% of the applications, Federal Housing Administration loans accounted for 28%, U.S. Veterans Administration loans comprised 9.9%, and Rural Housing Service and United State Department of Agriculture loans accounted for 0.4%. The average size of loans for new homes fell in November to $402,873, down from October’s average of $409,942.

Joel Kan, MBA’s vice president and deputy chief economist, remained upbeat about the numbers, despite the month-over-month decline. He said applications to purchase newly built homes have seen annual increases since February 2023, as prospective homebuyers continue to favor new homes, given affordability challenges and limited inventory.

“The decline in applications from the previous month was roughly in-line with typical seasonal patterns at the end of the year,” Kan said. “The FHA share of applications, at 28%, continues to show that first-time homebuyers account for a significant share of new home demand. Additionally, the 713,000-unit seasonally adjusted annual pace of new home sales was the third-strongest month of 2024.”