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Institutional Financial Analysis

Home/Real Estate/MORTGAGE APPLICATION VOLUME

Government-Backed Mortgages Fuel Surge in New Home Buying

SR

Sienna Rutherford

mortgage application volume · Apr 14, 2026

Government-Backed Mortgages Fuel Surge in New Home Buying

Source: DojiDoji Data Terminal

New home purchase applications surged in March as affordability pressures pushed buyers toward government-backed financing, with FHA, VA, and USDA/RHS loans accounting for more than half of all applications — the third straight month above 50%. This shift helped drive mortgage applications for new homes up 26% from February and 11% higher than a year ago, reaching the highest level since the Mortgage Bankers Association began its survey in 2012.

Related Brief1d ago
mortgage rates

Rely Mortgage Rates Drop by Up to 0.54 Percentage Points

A one-year fixed mortgage rate from Rely is now 3.68%, a decrease of 0.54%. A two-year fixed rate is 3.80%, down 0.54%. A five-year fixed rate is 4.73%, down 0.49%. These changes follow a confirmation from Rely, part of OneSavings Bank, that it has reduced rates across its range, including limited edition products.

The MBA estimated new single-family home sales at a seasonally adjusted annual rate of 717,000 units in March, up 11.9% from 641,000 in February. On an unadjusted basis, new home sales jumped to 69,000 last month from 57,000 in February.

Related Brief1d ago
mortgage rates

Borrowers face diverging mortgage paths as lenders split on rate moves

Mortgage applicants now face a split market where timing and lender choice directly determine borrowing cost trajectory. Rely, part of OneSavings Bank, has cut rates across its fixed-term range: the one-year fixed rate drops 0.54 percentage points to 3.68%, the two-year to 3.80% (also down 0.54 points), and the five-year to 4.73%, a reduction of 0.49 points. These reductions apply to both standard and limited edition products. Leeds Building Society is moving in mixed directions—raising some residential fixed rates while reducing others. Selected limited company buy-to-let fixed rates fall by up to 0.23%, and affordable housing fixed rates drop by up to 0.35%. The society is also extending residential and interest-only mortgage end dates to July. Meanwhile, Clydesdale is increasing select product transfer rates: Core Residential two- and five-year fixed rates rise by up to 0.28%, and Core Buy to Let equivalents by up to 0.63%. To lock in current rates, applicants must submit by 8pm on 13 April. The lender is aligning its product end dates to 31 July of the relevant year. Borrowers face diverging mortgage paths as lenders split on rate moves.

While overall mortgage rates rose in March, FHA loan rates increased more slowly than those for conforming loans, making government-backed options relatively more attractive. The average loan size for new homes edged down to $381,938 from $383,570 the prior month. Conventional loans made up 49.1% of applications, while FHA loans accounted for 36.3%, VA loans 13.4%, and USDA/RHS loans 1.2%.

Related Brief1d ago
housing market

Trump Housing Initiatives Fail to Offset High Borrowing Costs

Prospective homebuyers face elevated borrowing costs through 2026. This pressure is driven by Federal Reserve interest rates that market expectations suggest will remain high. The Trump administration has attempted to mitigate these costs through a $200 billion mortgage bond-buying initiative and a ban on institutional investors buying single-family homes. Zillow Group Inc. expects U.S. home prices to rise 0.7% by the end of 2026.

Higher levels of unsold, move-in-ready inventory in many markets also supported demand, offering buyers a faster path to homeownership amid ongoing supply constraints. As affordability remains a central concern, the sustained tilt toward government-backed financing signals a structural shift in how buyers are navigating today’s housing market.

Related Brief7h ago
mortgage underwriting

FHA spousal debt rule creates a debt-to-income imbalance for borrowers in community property states

Married homebuyers in community property states find their purchasing power reduced and some families are pushed out of the market because of a mortgage underwriting rule. The Federal Housing Administration (FHA) requires lenders to count a non-borrowing spouse’s debts when processing mortgage applications in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Lenders are prohibited from counting that same spouse’s income unless the spouse is an official co-borrower. This inflates a borrower’s debt load on paper, which increases their debt-to-income ratio. The National Association of Real Estate Brokers (NAREB) argues this creates a punitive double standard. Black borrowers in community property states face higher loan denial rates and receive smaller approved mortgage amounts than their White counterparts.

mortgage application volume

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