The latest Builder Application Survey (BAS) from the Mortgage Bankers Association (MBA) for September 2025 shows that mortgage applications for new home purchases increased 2% year-over-year. Month-over-month, compared to August 2025’s totals, applications decreased by 5%.
“MBA’s estimate of new home sales for September showed a 7% decline to an annual pace of 680,000 units after reaching a 10-month high in August. Given the current delay of the U.S. Census new home sales release due to the ongoing government shutdown, MBA’s estimate provides a leading indicator of the direction of the new home sales market for September,” said Joel Kan, MBA’s vice president and deputy chief economist. “Purchase activity for new homes continued to run ahead of last year’s pace, showing a 2% annual increase. Applications were down over the month, but were consistent with typical seasonal patterns for September. Despite more inventory, builder incentives, and lower mortgage rates, near-term demand is slowing as the labor market weakens.”
According to MBA estimates, new single-family home sales were running at a seasonally adjusted annual rate of 680,000 units in September 2025. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for September is a decrease of 6.8% from August’s pace of 730,000 units. On an unadjusted basis, MBA estimates that there were 54,000 new home sales in September 2025, a decrease of 3.6% from 56,000 new home sales in August.
By loan type, conventional loans composed 52.5% of loan applications, FHA loans composed 33.8%, RHS/USDA loans composed 1.0%m, while VA loans comprised 12.6%. The average loan size for new homes increased from $374,288 in August to $379,107 in September.
And as builders continue to struggle with market uncertainty, the National Association of Home Builders (NAHB) reports that builder sentiment levels posted a solid gain in October, as future sales expectations surpassed the 50-point breakeven mark for the first time since last January. Builder confidence in the market for newly built single-family homes was 37 in October, up five points from September and the highest reading since April, according to the NAHB/Wells Fargo Housing Market Index (HMI).
“While recent declines for mortgage rates are an encouraging sign for affordability conditions, the market remains challenging,” said NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, North Carolina. “The housing market has some areas with firm demand, including smaller builders shifting to remodeling and ongoing solid conditions for the luxury market. However, most home buyers are still on the sidelines, waiting for mortgage rates to move lower.”
As the housing market navigates its way through its current struggles, the latest HMI survey from the NAHB also reveals that 38% of builders reported cutting prices in October. This share has alternated between 37% and 39% since June. The average price reduction rose to 6% in October after averaging 5% for several months previously. The last time builders reduced prices by 6% was a year ago in October 2024. The use of sales incentives was 65% in October, unchanged from September.
“The HMI gain in October is a positive signal for 2026, as our forecast is for single-family housing starts to gain ground next year,” said NAHB Chief Economist Robert Dietz. “The 30-year fixed-rate mortgage fell from just above 6.5% at the start of September to 6.3% in early October. Combined with anticipated further easing by the Fed, builders expect a slightly improving sales environment, albeit one in which persistent supply-side cost factors remain a challenge.”
