Refinances overtook purchase loans for the first time since early 2022
Refinancing borrowers, not homebuyers, drove US mortgage activity in the final months of 2025, as falling rates nudged homeowners back to their lenders while purchase demand stayed soft.
ATTOM’s latest US Residential Property Mortgage Origination Report showed 1.72 million mortgages in Q4 2025, down 6% from Q3 but roughly flat year over year.
Total volume rose to $627.3 billion, up 1% quarter over quarter and 4% from Q4 2024, underscoring how larger average loan sizes and a shift toward refis helped keep dollar totals growing even as counts slipped.
“Loans, particularly for new purchases, typically slow down in the fourth quarter as fewer people are buying houses,” Rob Barber, CEO of ATTOM, said.
“But this year, that seasonal slowdown was offset by a rise in refinancing, likely driven by the steady drop in mortgage rates, which have been some of the lowest we've seen since 2022.”
Refis take the driver’s seat
Refinances accounted for 42.6% of all Q4 originations, surpassing purchase loans’ 39.9% share and marking the first quarter since early 2022 in which refis led the market.
ATTOM data showed 732,615 refi loans in the quarter, up 6% from Q3 and 11% year over year, with refi dollar volume jumping 25% quarter over quarter to $289.1 billion.
Refi growth was especially acute along the West Coast. Among metros with populations over 1 million, San Jose, California, led with refi originations up 91.1%, followed by San Francisco (up 50.4%), San Diego (up 49.4%), Seattle, Washington (up 46.1%), and Portland, Oregon (up 36.5%).
Overall loan counts also climbed in large California markets such as San Jose, San Francisco, San Diego and Los Angeles, along with Tucson, Arizona.
Earlier in 2025, Barber pointed to a structural shift away from purchase-heavy lending. “Rather than borrowing money to buy a new property, the data shows homeowners are increasingly looking to restructure their existing mortgages or borrow equity from their homes to cover other expenses,” he said in a prior origination report.
Mortgage Professional America sources have been flagging the turn for months. “(Rates have) been holding pretty steady, high sixes to low sevens, and it's still a great rate,” Michael Brennan, president of Nationwide Mortgage Bankers, said in mid‑2025, urging brokers to prepare for a refi upswing tied to even modest rate relief.
Another analyst, BTIG’s Eric Hagen, recently framed the challenge bluntly: “If mortgage rates are lower and they drop, how prepared are these originators going to be to refi all these borrowers?”
Purchases soften, equity and affordability stay in focus
Purchase originations told a different story. ATTOM reported 685,583 purchase loans in Q4, down 14% from Q3 and 13% from a year earlier, with volume falling to $278.1 billion.
The pullback was widespread but hit some Sun Belt and Rust Belt metros hardest. Among large markets, Austin, Texas, saw purchase loans fall 58.4% quarter over quarter. Buffalo, New York, dropped 46.8%; Atlanta, Georgia, 45.8%; Rochester, New York, 42.8%; and Detroit, Michigan, 38.2%.
The only large metros to post purchase gains were Tucson, Arizona (up 8.8%); Los Angeles, California (up 2.2%); and Orlando, Florida (up 1.6%).
Even as rates drifted down from their 2025 peaks, affordability remained strained in much of the country and many borrowers stayed sidelined.
Recent ATTOM affordability data showed typical housing costs above 28% of local wages in more than 70% of counties, with some large coastal markets far higher.
Homeowners, however, still sat on sizable cushions. ATTOM’s Q4 2025 equity report found 44.6% of mortgaged properties equity‑rich – down from the mid‑2024 peak but well above pre‑pandemic levels. That combination of high equity, easing but still‑elevated rates and a purchase slowdown appeared to channel more borrowers toward rate‑and‑term and cash‑out refinances, even as home‑equity line volumes slipped modestly quarter over quarter in the new ATTOM origination figures.
Government‑backed lending held steady in the mix, with FHA, VA and construction lending collectively supporting first‑time buyers and veterans but not fully offsetting the pullback in conventional purchase activity.
ATTOM’s methodology counted each recorded mortgage or deed of trust on 1‑ to 4‑unit properties as a separate origination and multiplied loan counts by average amounts to calculate volume, a standard approach but one that could mask shifts in loan size distribution across segments.
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