Mortgage applications for new home purchases increased 2.5% year-over-year in December 2025, according to data released by the Mortgage Bankers Association (MBA). The figures, drawn from MBA’s Builder Application Survey (BAS), reflect stronger demand for newly constructed homes compared with the same month a year earlier, despite a sequential decline from November and continued headwinds in the broader housing market.
The BAS data show that applications fell 3% from November to December on an unadjusted basis, a typical seasonal trend for year-end homebuying. However, the annual gain highlights sustained interest in new construction amid elevated inventories relative to existing home stock. Builders in some markets have responded with incentives and price adjustments intended to stimulate buyer activity.
“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. 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.”
MBA emphasizes that its model, which incorporates BAS mortgage application data and coverage assumptions, often serves as a leading indicator ahead of official Census Bureau new home sales reports, which lag due to data processing delays.
By loan type, conventional mortgages accounted for roughly 50.5% of applications, with FHA loans at 34.7%, VA loans at 13.8%, and RHS/USDA loans at approximately 0.9%. The average loan amount for new homes increased slightly from November to December, rising to $380,607.
