Mortgage applications for new home purchases in December increased by 2.5% from one year ago, according to data from the Mortgage Bankers Association (MBA). On a month-over-month measurement, applications decreased by 3%.
MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 640,000 units in December, a decrease of 15.2% from the November pace of 755,000 units. On an unadjusted basis, MBA estimated that there were 50,000 new home sales in December, a decrease of 2% from 51,000 new home sales in November.
The average loan size for new homes increased from $378,063 in November to $380,607 in December. By product type, conventional loans composed 50.5% of loan applications, FHA loans composed 34.7%, VA loans composed 13.8%, and RHS/USDA loans composed 0.9%.
“December purchase activity for newly built homes continued to run stronger than last year, despite cooling slightly from the prior month,” said Joel Kan, MBA’s vice president and deputy chief economist. “New homes remain a viable option for many homebuyers given that there is a relatively large number of new homes available for sale, which has prompted incentives and price reductions from builders in some markets.”
Kan added, “The annualized sales pace dropped to 640,000 units in December, the slowest sales pace since May, but that was still almost 7% higher than last year’s pace. In our latest forecast, we expect new home sales in 2026 will increase gradually as mortgage rates stay close to current levels and sales price growth remains muted, given the excess inventory. MBA’s new home sales estimate continues to lead results from the Census Bureau, which currently only has data published through October due to delays stemming from the recent government shutdown.”
