Government-Backed Mortgages Fuel Surge in New Home Buying
SR
Sienna Rutherford
mortgage application volume · Apr 14, 2026
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.
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.
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%.
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.
mortgage application volume
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