Loan applications for new home purchases increased 9.2% year over year in January, according to the Mortgage Bankers Association.

New single-family home sales occurred at an estimated seasonally adjusted annual rate of 562,000 units in January, a 17.6% jump from December, the MBA said Tuesday based on the results of its Builder Application Survey.

Current market fundamentals are expected to buoy demand for new homes in the year ahead.

"Alongside relatively low supply, rising household incomes and favorable demographics should continue to bolster demand for new homes, despite rising interest rates, leading to modest growth in new home sales this year," Lynn Fisher, MBA's vice president of research and economics, said in a news release.

Conventional loans composed 67.2% of new-home purchase applications in January, while Federal Housing Administration loans represented an 18.6% share. Additionally, USDA loans composed 1.1% of applications and VA loans 13%.