Despite reports of high mortgage rates and high housing costs, mortgage applications for new homes appear to be picking up. According to the Mortgage Bankers Association, mortgage applications for new-home purchases increased by 8.2% from October 2023 to October 2024. Additionally, on a month-over-month basis, applications increased by 3%. A majority of these mortgage applications were conventional loans—comprising 60.8% of the total. Loans made through the Federal Housing Administration accounted for 28.7% of the total new-home loan applications in October.
“New home purchase activity picked up in October even as stronger economic data and election uncertainty pushed mortgage rates higher over the course of the month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Both new applications and estimated home sales were higher compared to year-ago levels. New homes are an attractive alternative for many buyers as existing inventory is still tight in many markets around the country and a newly constructed home provides additional customization options. The average loan size picked up to almost $410,000, the highest in the survey since August 2022.” Read more