U.S. mortgage lending pulled back modestly in the third quarter of 2025, with 1.77 million residential loans originated, down 2% from Q2 but still nearly 2% higher than one year ago, according to ATTOM’s Q3 2025 U.S. Residential Property Mortgage Origination Report. Total dollar volume also eased 3% quarter over quarter to $600.4 billion, despite posting a 3% annual increase.
Purchase Activity Declines as Affordability Weighs on Buyers
Purchase originations dropped to 765,667 loans, falling 5% from the previous quarter and 7% year over year. The pullback continued to reflect strained affordability as high prices and elevated mortgage rates limited buyer mobility. More than two-thirds of U.S. metros saw quarterly declines, with some of the sharpest drops occurring in major Texas and Southeast markets such as Austin, Atlanta, and Dallas. A few large metros—including Buffalo, New York, and Cleveland—posted modest quarterly gains.
Refinance and HELOC Activity Edges Higher
Refinancing posted slight improvement, rising 0.2% from Q2 and 12% annually to 688,502 loans, as some homeowners took advantage of small rate dips. HELOCs continued their upward trend, increasing 3% quarter over quarter and 5% annually, marking growing equity utilization among borrowers. Several large metros, including Portland, Las Vegas, and Phoenix, recorded notable increases in refinance or HELOC activity.
Government-Backed and Construction Lending Softens
FHA, VA, and construction lending each saw modest quarterly declines as overall borrowing activity cooled. FHA loans represented 14% of originations, VA loans 5.7%, and construction loans 1.1%. Despite the slowdown, government-backed programs remained essential for first-time buyers and military households navigating affordability challenges.
Heading Into Q4: A Market Showing Cautious Stability
The third quarter continued to illustrate a steady but constrained lending landscape. While purchase demand softened, the resilience in refinance and home-equity borrowing helped balance overall activity. As rates and home prices continue shaping borrower sentiment, ATTOM’s Q3 data signals a cautiously stable mortgage market as the industry moves into the final quarter of 2025.
To learn more and access more detailed data or get the data behind the stories, contact one of ATTOM’s data experts.