Mortgage Origination Activity Remains Stuck In Neutral

In the third quarter of 2025, 1.77 million mortgages were issued on residential properties with one to four units, representing a decrease of 1.6% from the previous quarter but a 1.9% increase from the same period last year.

That’s according to ATTOM‘s Q3 2025 U.S. Residential Property Mortgage Origination Report, released on Thursday. The company’s data revealed that refinance and home equity lending activity showed resilience, while purchase loan demand remained soft.

The total dollar volume of originations reached $600.4 billion, a 3.1% decline from the figure of $619.7 billion in Q2 2025 but up 3.1% compared to Q3 2024. Purchase lending fell on both a quarterly and yearly basis, while refinance and home equity lending posted modest gains during both periods.

“Mortgage activity eased back a touch from the spring pickup, but it’s still running slightly ahead of last year,” said Rob Barber, CEO of ATTOM. “The modest lift in refinance and HELOC activity suggests some homeowners are taking advantage of small rate improvements and tapping equity, while purchase activity remains constrained by affordability.

“Taken together, Q3 looks like a market treading water rather than turning a corner.”

Mortgage activity increased quarter over quarter in 98 of the 209 metro areas analyzed. Among metros with populations of at least 1 million, the biggest gains were in Buffalo, New York (up 17.3%); Cleveland (up 12%); New York City (up 10.2%); Philadelphia (up 8.1%); and Portland, Oregon (up 7.5%).

Purchase loan originations, meanwhile, fell to 765,667 in Q3, a drop of 4.8% from Q2 and 6.6% from Q3 2024. The dollar volume of purchase loans slid to $309.6 billion, down 5.2% from the previous quarter and 3.3% annually. ATTOM found that purchase loans accounted for 43.2% of all originations and 51.6% of total volume, compared to 44.6% and 52.7% in Q2, respectively.

Refinance originations ticked up to 688,502, up 0.2% from Q2 and 12% from Q3 2024. Refi volume fell 1.2% quarterly but rose 12.5% annually to $229.7 billion.

Refinances accounted for 38.8% of all loans and 38.3% of total lending dollars, slightly higher than in the previous quarter.

HELOCs increase, FHA/VA loans drop

Home equity line of credit (HELOC) originations increased to 319,318 loans, up 2.8% quarterly and 4.6% annually. HELOC dollar volume rose to $61.1 billion, up 0.7% from Q2 and 5.9% from Q3 2024.

HELOCs represented 18% of all mortgages and 10.2% of total dollar volume in the third quarter, up from 17.2% and 9.8% in Q2, respectively.

Government-backed and construction lending declined slightly in Q3. Federal Housing Administration loans accounted for 14% of all originations, down from 14.9% in Q2. U.S. Department of Veterans Affairs loans made up 5.7%, down from 5.9%, while construction loans dropped to 1.1% of all mortgage activity, compared to 1.5% in Q2.