January New Home Sales and Mortgage Applications Point to Strong Start in 2026

January new home mortgage applications increased, pointing to a stronger start for new construction activity in 2026.

Data from the Mortgage Bankers Association (MBA) Builder Application Survey shows that mortgage applications for newly built homes rose 2% compared to January last year. On a month-over-month basis, applications jumped 19% from December 2025. The monthly increase was not adjusted for seasonal trends.

New Home Demand Gains Early in the Year

According to MBA officials, both mortgage applications and new home sales improved in January.

Joel Kan, MBA’s Vice President and Deputy Chief Economist, said the increase aligns with stronger single-family housing starts at the end of 2025. While building permits remained mostly steady, construction activity closed the year on firmer ground.

The MBA estimates that new single-family home sales ran at a seasonally adjusted annual pace of 663,000 units in January. That marks a 3.6% increase from December’s revised pace of 640,000 units.

On an unadjusted basis, the association estimates about 58,000 new homes were sold in January, up 16% from 50,000 in December.

Loan Sizes Continue to Rise

The average loan size for new home purchases increased to $385,506 in January, up from $380,607 the previous month. That is the highest average loan amount recorded in 11 months.

Rising loan sizes may reflect higher home prices, buyer demand for larger homes, or a mix of both.

Builders have also continued offering incentives to attract buyers, including rate buydowns and price concessions. Adjustable-rate mortgages (ARMs) remain part of the financing mix for some buyers seeking lower initial payments.

Breakdown by Loan Type

The Builder Application Survey also provides insight into how buyers are financing newly built homes:

• Conventional loans: 48.9%
• FHA loans: 34.9%
• VA loans: 14.8%
• RHS/USDA loans: 1.3%

Conventional loans continue to make up the largest share, but FHA and VA programs remain important options, especially for first-time buyers and veterans.

Why the Survey Matters

The MBA’s Builder Application Survey tracks mortgage applications submitted through builder-affiliated lenders nationwide. Because it captures data early in the sales process, it often serves as a leading indicator of official government reports.

The association uses this data, along with market assumptions, to estimate new home sales at the national, state, and metro levels. Official figures are later released by the U.S. Census Bureau in its monthly New Residential Sales report.

What It Means for New Construction in 2026

The January new home mortgage applications data suggests that demand for newly built homes remains steady despite affordability challenges.

Builders have continued to adjust strategies to maintain sales, including offering financial incentives and focusing on homes priced for entry-level and move-up buyers.

If mortgage rates remain stable and employment conditions hold firm, new construction could see continued support through the early months of 2026.

While one month of data does not define a long-term trend, January’s results indicate that the new home market is entering the year with renewed momentum. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.