The Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS) for October demonstrated the importance of distinguishing between seasonally adjusted and unadjusted numbers when evaluating mortgage purchase data.
The BAS data indicated a 2.6 percent decline in October mortgage purchase applications compared to the same month last year on an unadjusted basis. However, the seasonally adjusted count indicated purchase applications “remained at a healthy pace relative to the past three years,” according to MBA Deputy Chief Economist Joel Kan.
This was largely driven by easing mortgage rates, which led to a notable uptick in adjustable-rate mortgage (ARM) activity.
“Lower mortgage rates, ongoing usage of builder concessions, and growing levels of for-sale inventory drove an increase in new home sales for October. The annual sales pace, at 771,000 units, was the strongest in over a year,” Kan said in a press release. “The increased use of ARM loans, for which rates were averaging almost 80 basis points lower than fixed-rate loans, also contributed to the jump in sales and a slightly higher average loan size, the third monthly increase. In October, our data showed that ARM loans accounted for 25 percent of applications, up from 16 percent a year ago.”
MBA estimated the new single-family home sales figure, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, to be running at a seasonally adjusted annual rate of 771,000 units in October 2025, according to the release. This estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for October indicated a 13.4 percent increase from September’s pace of 680,000 units. On an unadjusted basis, MBA estimated that there were 55,000 new home sales in October 2025 – an increase of 1.9 percent from 54,000 new home sales in September.
By product type, conventional loans composed 51.9 percent of loan applications, Federal Housing Administration loans composed 35.1 percent, U.S. Department of Agriculture loans composed 0.7 percent and Department of Veterans Affairs loans composed 12.3 percent. The average loan size for new homes increased from $379,107 in September to $381,404 in October.