A 2.4% year-over-year drop in mortgage applications for new home purchases was recorded in April, according to a survey released by the Mortgage Bankers Association — marking the first such annual contraction since October 2025.On a month-over-month basis, unadjusted application volume fell 10% from March, a comparison the MBA noted does not account for seasonal trends."Ongoing economic uncertainty and higher mortgage rates contributed to lower purchase activity for newly built homes in April," said Joel Kan, MBA's vice president and deputy chief economist, in a statement.Using application data to project broader market activity, the MBA put the seasonally adjusted annual rate of new single-family home sales at 655,000 units for April, a figure 8.6% below the revised March estimate of 717,000 units. Stripped of seasonal adjustment, the association counted roughly 60,000 new home sales during the month, compared with 69,000 in March — a 13% retreat.Government-backed loans accounted for just over half of all applications in April, according to Housing Wire. Breaking down the April mix, conventional products held a 49.5% share, while FHA loans represented 35.7%, VA loans 13.7%, and USDA loans 1.1%. The typical loan amount on a new-home purchase edged down to $378,384 from $381,938 the prior month.Kan noted that high levels of unsold inventory exist across many markets, but said MBA expects purchase activity to pick up as upward price pressures continue to fade. "FHA, VA, and USDA applications accounted for a little over half of all applications in April, as many borrowers continued to rely on government programs to help with affordability," he said.Data for the report comes from the MBA's Builder Application Survey, which aggregates volume from builder-affiliated mortgage operations nationwide; the survey is watched as an early signal for the U.S. Census Bureau's New Residential Sales report, a separate release that captures transactions at the point of contract execution.