New Home Purchase Mortgage Demand Rises 2.5% In December

Mortgage applications for new home purchases rose 2.5% in December 2025 from a year earlier, according to data released Thursday in the Mortgage Bankers Association (MBA)’s Builder Application Survey.

Applications fell 3% compared to November 2025 without any seasonal adjustment.

“December purchase activity for newly built homes continued to run stronger than last year, despite cooling slightly from the prior month,” Joel Kan, MBA vice president and deputy chief economist, said in a statement. “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 noted that the annualized sales pace dropped to 640,000 units in December, the slowest sales pace since May 2025. But that was still nearly 7% higher compared to the December 2024 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,” Kan added.

MBA’s estimate — which is based on mortgage application data from its Builder Application Survey — and other assumptions, is considered a leading indicator of the U.S. Census Bureau’s New Residential Sales report. Kan said the current data available is only through October 2025 “due to delays stemming from the recent government shutdown.”

On a seasonally adjusted basis, the December sales estimate was down 15.2% from November’s pace of 755,000 units. On an unadjusted basis, MBA estimates there were 50,000 new home sales in December, down 2% from 51,000 in November.

Conventional loans accounted for 50.5% of applications, followed by Federal Housing Administration (FHA) loans at 34.7%, U.S. Department of Veterans Affairs (VA) loans at 13.8% and U.S. Department of Agriculture (USDA) loans at 0.9%. The average loan size for new homes rose to $380,607 in December, up from $378,063 in November.

The Builder Application Survey tracks mortgage application volume from builder-affiliated lenders nationwide. It provides early estimates of new home sales at the national, state and metro-area levels, as well as data on loan types used by homebuyers.

The census bureau reports official new home sales monthly, recording sales at contract signing, which typically coincides with a mortgage application.