Mortgage applications for newly built homes declined in April, marking the first year-over-year slowdown in new-home purchase activity since October 2025 as affordability pressures and elevated mortgage rates continued weighing on buyers.
According to the latest Builder Application Survey from the Mortgage Bankers Association, applications for new-home purchase mortgages fell 2.4% year over year in April and dropped 10% from March on an unadjusted basis.
The survey also estimated new single-family home sales were running at a seasonally adjusted annual rate of 655,000 units in April, down 8.6% from March’s revised pace of 717,000 units. On an unadjusted basis, MBA estimated 60,000 new-home sales for the month, compared with 69,000 in March.
“Ongoing economic uncertainty and higher mortgage rates contributed to lower purchase activity for newly built homes in April,” said Joel Kan, MBA’s vice president and deputy chief economist. “Applications to purchase new homes fell below last year’s pace, the first year-over-year decline since October 2025.”
For mortgage professionals, the report reinforces how critical government lending has become in the current affordability environment — particularly in the builder space, where incentives and rate buydowns are increasingly being used to keep buyers engaged.
FHA loans accounted for 35.7% of applications in April, while VA loans made up 13.7% and USDA loans represented 1.1%.
Conventional loans accounted for 49.5% of activity. Combined, government-backed programs made up just over half of all new-home purchase applications.
“FHA, VA, and USDA applications accounted for a little over half of all applications in April, as many borrowers continued to rely on government programs to help with affordability,” Kan said.
The average loan size for new homes also edged lower, falling from $381,938 in March to $378,384 in April.
That decline may indicate buyers are gravitating toward smaller homes or more moderately priced inventory as monthly payment pressures persist. It also suggests builders may be continuing to adjust pricing and offer concessions to maintain sales momentum.
The slowdown comes as builders across many markets are contending with elevated standing inventory levels and softer affordability conditions. Industry analysts have increasingly pointed to rate buydowns, closing-cost assistance, and smaller floor plans as key tools builders are using to keep transactions moving.
Kan noted that MBA still expects activity to improve in the coming months as price pressures continue easing.
The April data also arrives as mortgage rates continue climbing. The average 30-year fixed mortgage rate rose to 6.56% in the latest MBA weekly survey, reaching its highest level in seven weeks.
*This article was drafted with AI assistance and reviewed and edited by a human editor before publication.
