Loan applications for newly constructed homes increased 19% between December and January, benefitting from how housing starts performed at the end of 2025, according to the Mortgage Bankers Association.
Year-over-year, however, volume increased by just 2%, the MBA's Builder Application Survey reported.
Rates for the 30-year fixed reached a three-year low at 6.09% during January (
"New home purchase activity strengthened in January, as both mortgage applications and new home sales saw gains," Joel Kan, the MBA's deputy chief economist, said in a press release. "This increase was consistent with single-family housing starts finishing 2025 at a stronger pace even as permitting stayed relatively flat."
December housing start data
This also comes against a backdrop of
Kan's comments on the BAS are indicative of those concerns.
"MBA's January estimated sales pace for newly built homes
Adjustable-rate mortgages typically have a lower starting rate for a borrower. The 5/1 ARM tracked by the MBA's Weekly Application Survey was at 5.29% this week, while the conforming 30-year FRM was at 6.17%.
ARMs made up 8.2% of all mortgage applications submitted for the period ended Feb. 13.
The seasonally adjusted sales pace estimate for January is an increase of 3.6% over the 640,000 units during December. On an unadjusted basis, 58,000 new home sales took place during January, an increase of 16% from 50,000 units in December, the MBA estimated.
Conventional loans (both conforming and jumbo) had the highest share of application volume, at 48.9%. The Federal Housing Administration was at 34.9%, Veterans Affairs made up 14.8% of the total, while the U.S. Department of Agriculture's Rural Housing Service program composed 1.3%.
Homebuilder perceptions of profitability versus reality
Meanwhile, a discrepancy between what U.S. homebuilders are reporting for profitability and whether they are actually making money or not has surfaced, the 2026 State of Residential Construction Industry Report from the Association of Professional Builders alleged. The APB claims this results from misunderstanding by accountants who "do not fully understand how construction financials work" and builders trust in their reporting not any kind of deliberate misrepresentation.
There were no immediate responses to these allegations from other groups representing builders on accountants at the time of this writing.
While this data point is limited to builders in this country, the report also covers residential builders in Australia, Canada and New Zealand.
Just 17.1% of the U.S. builders self-reported they were not profitable during the survey period which was late 2025. When what APB called "accounting accuracy" was applied, this grew to 51.4%. This trend was also seen in the other countries the report covered, leading to what it termed zombie companies which generate cash flow while slowly eroding equity.
A substantial number of builders lack the understanding of the metrics which drive their business, APB said. Only 12% correctly demonstrated knowledge of what the organization called the four critical financial metrics: work in progress adjustments; markup versus margin; fixed expense ratios; and net profit margins.
"The data shows a clear difference between reported profitability and financial reality for many building companies," said Russ Stephens, APB co-founder, in a press release. "When core financial metrics are not fully understood or applied correctly, profitability can be overstated without builders realizing it."
An area profitability correlates with is the marketing of a newly built home, the report noted.
"Builders spending nothing on marketing had the lowest gross markup at 20%. Those investing 1% to 3% of revenue saw markups of 25 to 26%," APB found. "Builders committing 4% or more to marketing achieved peak performance with 29% gross markup and 9% net profit margins."
