New Home Mortgage Applications See 10.8% Annual Increase, Reflecting Strong Buyer Interest

by Scott Kaplan

In September 2024, mortgage applications for new home purchases increased by 10.8% compared to the same month last year, reflecting the ongoing appeal of newly built homes despite fluctuations in market conditions. The Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS) shows that while applications dipped 6% from August to September 2024 (a common seasonal trend), interest in new home sales remains strong.

Why New Homes Are Attracting Buyers

"Despite a seasonal dip in applications, the year-over-year increase shows the continued interest in new homes," says Joel Kan, MBA’s Vice President and Deputy Chief Economist. He notes that new home sales are particularly attractive now due to lower mortgage rates and an increased inventory of newly constructed homes on the market. First-time buyers remain active, as evidenced by a rise in FHA applications, which nearly reached 29% of total applications.

New Home Sales Estimates

According to MBA’s data, the seasonally adjusted annual rate for new single-family home sales reached 680,000 units in September 2024—a 12.4% decrease from the August rate of 776,000 units. Unadjusted, MBA estimates indicate around 54,000 new homes sold in September, down from 60,000 in August.

Types of Loans and Average Loan Size

Breaking down the mortgage applications for new homes, the majority (61.2%) were conventional loans, followed by FHA loans at 28%, VA loans at 9.6%, and USDA loans at 0.4%. Notably, the average loan size for new homes grew slightly from $395,935 in August to $402,658 in September, marking a positive trend for developers and the market as a whole.

How the MBA Builder Application Survey Helps the Industry

MBA’s Builder Application Survey (BAS) offers valuable insights into application volumes from homebuilders’ mortgage subsidiaries nationwide. This data, combined with market assumptions, provides early estimates of new home sales trends, while official figures come from the U.S. Census Bureau based on contract signings, typically aligned with mortgage applications.

For prospective homebuyers, the data reflects continued growth in new home options, with favorable loan programs supporting first-time buyers looking to build their path to homeownership.

Source: Mortgage Bankers Association