Mortgage Applications for New Homes Fall 28.6% on Year-Over-Year Basis in October

As mortgage rates rise to around 7%, both housing demand and the purchasing power of prospective buyers falls.

By Vincent Salandro

Mortgage applications for new-home purchases in October decreased 28.6% compared with a year ago, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). On a month-over-month basis, applications decreased 13% in October.

“New-home purchase activity weakened on a monthly and annualized basis in October, as the sharp jump in mortgage rates to nearly 7% reduced both overall demand and the purchasing power for many prospective buyers,” says Joel Kan, MBA’s vice president and deputy chief economist. “The average loan size decreased to $400,616, down 8% from its peak in April 2022.”