Mortgage Preapprovals Gain Ground Despite Rising Home Prices, Loan Amounts

Even though higher home sales prices were prevalent in the second quarter of 2025, borrower activity held steady, with preapprovals rising nearly 12% and average loan amounts jumping to $367,305.

That’s according to the LenderLogix Homebuyer Intelligence Report, a quarterly summary of insights into borrower behavior. The latest report, released Tuesday, covers data collected during the preapproval and borrower application process in Q2 2025.

In Q2 2025, borrowers generated 11.9% more preapproval letters through the company’s QuickQual preapproval platform compared to the first quarter of this year.

The average number of preapproved borrowers per loan officer increased from 26.5 in Q1 2025 to 28.6 in Q2 2025, while the average preapproved loan amount increased from $326,714 to $367,305 during the same time span.

The average home sales price also jumped significantly, going from $381,820 in Q1 to $423,667 in Q2. The average down payment size, however, decreased slightly from 14.4% in Q1 to 13.3% in Q2.

Conventional loans remained the most popular loan type for preapproved borrowers in Q2, increasing their share from 74.2% to 74.7% on a quarterly basis. Preapprovals for Federal Housing Administration (FHA) loans saw a slight decrease in share, from 19% to 18.6%, while U.S. Department of Veterans Affairs (VA) loans and U.S. Department of Agriculture (USDA) loans maintained their shares at 4.5% and 1%, respectively.

“Despite the increase in sales price, we’ve seen increased prequalification numbers for conventional, FHA, VA and USDA loans, demonstrating borrowers’ desire to purchase,” said Patrick O’Brien, co-founder and CEO of LenderLogix. “Lenders and real estate partners need to be vigilant to help borrowers find homes that fit their prequalification amounts.”

Preapproval to submission data

For borrowers who used QuickQual in Q1 2025, the average number of days between preapproval and loan submission increased from 79.6 days to 86.3 days in Q2 2025.

Meanwhile, the conversion rate among borrowers from preapproval to loan application increased only slightly, from 55% in Q1 to 56% in Q2. Borrowers maintained an average of eight preapproval letters before converting.

In total, new applications through the LiteSpeed POS platform increased 8.7% between the first and second quarters of 2025.

“Overall, borrower conversion and activity are remaining fairly steady,” O’Brien said. “Lenders must hone their marketing and outreach strategies to effectively reach the prepared borrowers in their area to remain competitive.”

In Q2 2025, the number of documents uploaded through LiteSpeed grew 18.3% quarter over quarter. The number of newly created needs lists — including both online applications and those entered by loan officers — decreased 16.7%.

Successful verification of income and employment (VOIE) through point-of-sale systems improved, increasing from 15.5% in Q1 to 17.1% in Q2. Verification of assets (VOA) decreased from 36.7% to 33.7% during the same period.

“While we saw a dip in Needs List creation, the continued growth in document uploads and improved VOIE success rates suggest borrowers are more prepared and proactive after application,” O’Brien said. “That preparation ultimately helps lenders build cleaner, faster-moving loan files.”