March New Home Mortgage Applications Increased
In March 2025, mortgage applications for newly built homes saw a noticeable increase, signaling renewed momentum in the housing market. The rise in demand was closely tied to a drop in interest rates and a broader selection of move-in-ready properties.
Mortgage Activity Rebounds
According to industry data, applications for new home purchases rose sharply. On a seasonally adjusted basis, application volume increased by 7% compared to the previous week. The unadjusted numbers were even stronger, up by 8%—a clear sign that more buyers are entering the market.
One of the key drivers? Lower mortgage rates. The average rate for a 30-year fixed mortgage dropped to 6.67%—the lowest level since October 2024. That shift helped reignite interest from homebuyers who had previously been priced out.
Larger Loans, Growing Confidence
The average loan size for new home purchases reached a record high of $460,800, reflecting buyers’ willingness—and ability—to borrow more. This trend suggests growing confidence in the market, particularly among higher-income buyers.
In addition, government-backed loan activity also climbed. Applications for FHA loans rose by 11%, helped by a decline in FHA mortgage rates to 6.34%. These options are especially attractive to first-time buyers and those with smaller down payments.
What This Means for the Market
This spring is shaping up to be an active season for homebuying. The combination of lower borrowing costs and a wider range of available new homes is giving buyers more reasons to make their move
If mortgage rates remain steady or continue to decline, the uptick in new home demand could persist—offering a much-needed boost to builders and helping to ease some of the pressure in today’s tight housing inventory.
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