Mortgage Originations Slip in Q3 as Homebuyers Pull Back, But Refis and HELOCs Gain Ground

U.S. mortgage activity cooled slightly in the third quarter of 2025, according to ATTOM’s latest U.S. Residential Property Mortgage Origination Report. While the overall market showed a small pullback, refinance loans and home-equity borrowing continued to grow, giving lenders a mixed but steady finish to the summer market.

ATTOM reported that 1.77 million mortgages backed by residential properties were issued in Q3 down 1.6% from Q2, but up 1.9% from a year earlier. CEO Rob Barber called Q3 a “steady but cautious period,” noting that homeowners seem more willing to refinance or tap equity, while potential buyers are still struggling with affordability.

Total loan volume came in at $600.4 billion, a small step down from the previous quarter, but still above last year’s level.

Overall Lending Pulls Back Slightly

A total of 1,773,487 mortgage loans were originated in the quarter, a slight dip from Q2. Despite the broader slowdown, 98 of 209 metros tracked by ATTOM still posted quarterly growth.

Top Gaining Large Metros (Quarter-over-Quarter)

• Buffalo, NY — +17.3%
• Cleveland, OH — +12%
• New York, NY — +10.2%
• Philadelphia, PA — +8.1%
• Portland, OR — +7.5%

Biggest Declines

Some markets saw sharper quarterly drops, including Austin, Myrtle Beach, Rochester, Waco, and Columbus, GA many of which have been adjusting from pandemic-era price spikes.

Purchase Loans Cool as Buyers Face Affordability Limits

Purchase activity took the biggest hit. Originations fell to 765,667 loans, down 4.8% from Q2 and 6.6% from last year. Dollar volume also fell to $309.6 billion.

Purchase loans made up:

• 43.2% of all mortgages
• 51.6% of total loan dollars

Both shares declined slightly from Q2 as fewer buyers entered the market.

Largest Purchase Loan Drops (Major Metros)

• Austin — –35.6%
• Atlanta — –25.8%
• San Antonio — –19.5%
• Washington, D.C. — –15.8%
• Dallas — –15.7%

On the flip side, Buffalo, New York City, Rochester, Cleveland, and Philadelphia all saw purchase gains many being markets where inventory has improved and prices remain relatively stable.

Refinancing Sees Small but Steady Growth

Refinance loans climbed to 688,502, a 0.2% rise from Q2 and a 12% jump from last year. Even though rate cuts have been gradual, small declines in mortgage rates have convinced some homeowners to lock in better terms.

Refis made up:

• 38.8% of all loans
• 38.3% of total dollar volume

Quarterly refinance gains were strongest in major metros such as:

• Las Vegas — +32.9%
• New Orleans — +17.9%
• Phoenix — +16.7%
• Cleveland — +15.4%
• Honolulu — +14.8%

HELOC Borrowing Continues to Climb as Homeowners Tap Equity

Home-equity lines of credit (HELOCs) remained one of the strongest areas of lending. Numbers rose to 319,318 loans, an increase of 2.8% from Q2 and 4.6% year-over-year. Dollar volume increased to $61.1 billion.

HELOCs now represent:

• 18% of all mortgage originations
• 10.2% of total mortgage dollars

Largest quarterly HELOC surges included:

• Portland, OR — +27.6%
• Virginia Beach, VA — +24.3%
• Richmond, VA — +22.5%
• Fresno, CA — +18.2%
• Birmingham, AL — +17.6%

Government-Backed and Construction Lending Edge Lower

Q3 saw small declines across FHA, VA, and construction lending:

• FHA: Down to 14% of all loans
• VA: Down to 5.7%
• Construction loans: Down to 1.1%

These shifts reflect slower homebuying activity and a cautious stance among borrowers facing higher overall costs.

A Market That’s Steady, Not Surging

ATTOM’s findings point to a housing-finance market still shaped by rate pressure and affordability challenges. Purchase loans continue to feel the strain of tight inventory and high prices, while refinances and HELOCs are giving homeowners more ways to adjust to today’s economic landscape.

As Q4 begins, ATTOM says the market is showing signs of stability but not yet momentum leaving 2025 likely to close out as a year of small steps rather than major shifts. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.