Investment

January new-build mortgage demand edges higher

Categories: Financial News, Real Estate + LendingPublished On: February 19th, 2026Comments Off21.3 min read

Evelle Dai

mortgage

January new-build mortgage demand edges higher
MBA data pointed to modest new-home gains in a market still constrained by affordability

Mortgage applications for new home purchases in January 2026 ticked up from last year and jumped from December, according to new figures from the Mortgage Bankers Association.

MBA’s Builder Application Survey showed applications for new home purchases were up 2% year over year and 19% from December 2025, before any seasonal adjustment.

The group estimated new single-family home sales were running at a seasonally adjusted annual rate of 663,000 units in January, a 3.6% gain from December’s 640,000, with an unadjusted 58,000 new-home sales versus 50,000 a month earlier.

“New home purchase activity strengthened in January, as both mortgage applications and new home sales saw gains,” said Joel Kan, MBA’s vice president and deputy chief economist.

“This increase was consistent with single-family housing starts finishing 2025 at a stronger pace even as permitting stayed relatively flat. MBA’s January estimated sales pace for newly built homes rebounded slightly from December to a pace of 663,000 units as buyers continue to use builder concessions and ARM loans. The average loan size of a purchase application was $385,506, the highest in 11 months.”

Conventional loans made up 48.9% of January applications, with FHA at 34.9%, VA at 14.8% and RHS/USDA at 1.3%.

The average loan size for new homes rose from $380,607 in December to $385,506 in January, underscoring that many buyers still stretched to afford new construction even as rates drifted closer to the mid‑6% range late last year.

Earlier MBA data showed January 2025 new-home applications down 6% annually, suggesting the latest 2% gain marked a tentative turn for builders after a softer start last year.

Meanwhile, mortgage rates edged lower last week to their weakest level in about a month, nudging more homeowners back into the refinance market even as would‑be buyers largely stayed on the sidelines.

The average contract rate on 30‑year fixed mortgages with conforming balances of $832,750 or less fell to 6.17% from 6.21%, with points steady at 0.56 for borrowers putting 20% down, according to MBA. That tracked closely with Freddie Mac’s national average 30‑year fixed rate of 6.09% for the week ending Feb. 12, down from 6.87% a year earlier.

Refinancing led the rebound in volume. Applications to refinance rose 7% week over week and were 132% higher than the same week in 2025, lifting the MBA’s Market Composite Index 2.8% on a seasonally adjusted basis.

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