Activity edged higher in third quarter, but affordability challenges continue to constrain the overall market
United States mortgage originations slipped 1.6% in the third quarter of 2025, with total dollar volume reaching $600.4 billion, according to ATTOM's latest data on residential mortgage activity.
The quarter produced 1.77 million mortgages secured by residential property, marking a 3.1% decline in lending volume from Q2 2025.
However, the market held steady against last year's pace, with originations climbing 1.9% annually and dollar volume rising 3.1% year over year.
"Mortgage activity eased back a touch from the spring pickup, but it's still running slightly ahead of last year," said Rob Barber, CEO at ATTOM.
"The modest lift in refinance and HELOC (Home equity lines of credit) activity suggests some homeowners are taking advantage of small rate improvements and tapping equity, while purchase activity remains constrained by affordability."
Purchase lending bore the brunt of the slowdown. Purchase mortgage loans fell to 765,667 originations in Q3 2025, a 4.8% drop quarter over quarter and 6.6% down from Q3 2024.
The decline reflected broader affordability pressures that continued to weigh on buyer sentiment across most US markets. Among the 209 metropolitan areas analyzed, purchase activity declined in 67% of them, with major markets including Austin, Atlanta, and San Antonio posting sharp declines of 35.6%, 25.8%, and 19.5% respectively.
Refinance loans provided a bright spot, edging up 0.2% quarter over quarter to 688,502 originations while climbing 12% year over year.
HELOCs also gained traction, rising 2.8% quarterly to 319,318 loans as some homeowners tapped accumulated equity amid modest rate improvements.
Government-backed lending programs slipped modestly. FHA loans accounted for 14% of all originations, down from 14.9% in the prior quarter, while VA loans represented 5.7%, down from 5.9%.
Construction lending declined to 1.1% of total mortgage activity from 1.5%.
"Taken together, Q3 looks like a market treading water rather than turning a corner," Barber said.
The data underscores a housing market caught between competing pressures: rate volatility that has benefited refinancing activity and home equity borrowing, yet affordability constraints that have kept purchase lending in check.
As the year draws to a close, the mortgage market faces a cautious backdrop, with origination activity stabilizing but remaining constrained by the fundamental challenge of home prices relative to household incomes.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
