New-Home Mortgage Applications Trend Down in October But Sales Are Up

According to the Mortgage Bankers Association’s Builder Application Survey for October 2025, mortgage applications for new homes decreased by 2.6% from one year ago and by 1% from September. Even so, sales of new-single family homes grew during the month to a seasonally adjusted annual rate of 771,000, an increase of 13.4% from the September pace of 680,000 units. Overall, it’s estimated that 55,000 new single-family homes sold in October.

Those purchasing or applying to purchase a new home in October were most likely repeat buyers with financial mobility. The average loan size for new homes increased from $379,107 in September to $381,404 in October.

At the same time, conventional loans continue to make up the bulk of loan applications for new homes. Approximately 51.9% of loan applications were for this loan type, while FHA loans made up 35.1% of applications, and VA loans made up just 12.3% of applications in October.

“Lower mortgage rates, ongoing usage of builder concessions, and growing levels of for-sale inventory drove an increase in new home sales for October. The annual sales pace, at 771,000 units, was the strongest in over a year,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The increased use of ARM loans, for which rates were averaging almost 80 basis points lower than fixed-rate loans, also contributed to the jump in sales and a slightly higher average loan size, the third monthly increase. In October, our data showed that ARM loans accounted for 25 percent of applications, up from 16 percent a year ago.”