IRVINE, CA — The latest U.S. Residential Property Mortgage Origination Report from ATTOM revealed a 14 percent drop in mortgage activity during the first quarter of 2025. A total of 1.4 million residential mortgages were issued across the country, marking a continued decline below pre-pandemic levels as the housing market adjusts.
Purchase loans showed the steepest decline, falling 20 percent quarter-over-quarter to 593,111. Refinancing activity also slid 12 percent to 580,170, and home equity credit lines (HELOCs) dipped 5 percent to 260,267. Collectively, these declines reduced the total loan value to $478 billion, an 18 percent drop from the preceding quarter.
The makeup of the mortgage market has shifted significantly. Home purchase loans, which once dominated the market, now account for 41.4 percent of all mortgages, down from 44.2 percent in the previous quarter. Meanwhile, refinancing deals and HELOCs have grown to represent 40.5 percent and 18.2 percent of the market, respectively.
“The red-hot housing market we’ve seen over the last few years meant that most home loans were going toward new purchases, but that appears to be changing,” said Rob Barber, CEO of ATTOM. “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.”
Barber predicted, “If the current trend continues, mortgage refinancing deals will soon make up the biggest share of the home loan market.”
Regional Trends Highlight Market Variances
The decline in mortgage originations was widespread, with only 13 of the 193 metro areas analyzed by ATTOM recording growth in loan activity. Markets such as Duluth, MN, Fort Wayne, IN, and Greeley, CO, experienced the largest quarter-over-quarter declines, all exceeding 30 percent.
While most regions faced quarter-over-quarter declines, year-over-year figures tell a mixed story. Nationwide, 73.6 percent of metro areas analyzed saw more loans issued in Q1 2025 compared to Q1 2024. Regions in Florida, including Cape Coral and Tampa, recorded notable growth, signaling stronger market activity.
Purchase loans followed the broader market contraction. Quarterly declines were evident in nearly 95 percent of metro areas analyzed, with Greeley, CO, and Anchorage, AK, leading the downturns.
Refinancing also saw contraction in Q1 2025, with loans dropping in 82.9 percent of markets. That said, areas like Lubbock, TX, and North Port-Sarasota, FL, bucked the trend with significant growth in refinancing activity. HELOCs were slightly more resilient but still fell in 61.7 percent of metro areas.
FHA and VA Loans Decline Quarterly
Government-backed loans saw slight fluctuations. FHA-backed mortgages dropped 8.8 percent quarter-over-quarter to 227,159, though they were up 2.6 percent year-over-year. VA-backed loans fell sharply, down 27.2 percent from Q4 2024 to 78,862 but grew 8.4 percent from the prior year.
The report underscores a changing landscape for the mortgage market as rising affordability challenges and shifting borrower priorities reshape the industry.
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