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

New-home mortgage applications declined slightly in October. 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.

However, while mortgage applications were down, sales of new-single family homes grew during October 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.”