Slow Buyer Activity Causes New Home Financing Deals to Decline
In the first few months of the year, homebuyers were largely inactive. According to property data provider ATTOM’s Q1 2025 U.S. Residential Property Mortgage Origination Report, just 1.4 million mortgages were taken out in the U.S. during Q1 2025, a 14% decrease from the previous quarter.
In early 2021, the number of new home financing deals peaked at 4.2 million loans, but that has since declined to below pre-pandemic levels. Q1 2025 saw a 20% decline in home-purchase loans, from 738,675 in Q4 2024 to 593,111 in Q1 2025.
Total dollar value of loans also decline as less homes sell
Because less home-purchase loans were taken out in Q1 2025, the total dollar value of loans fell by 18% to $478 billion. Not only did Q1 2025 see a decline in borrowers, but the average loan amount also fell. Home purchase loans—which previously accounted for more than half of all mortgages—comprise just 41.4% of the market, while the proportion of mortgage refinancing and home equity line of credit deals have increased to 40.5% and 18.2% of the market, respectively.
2025 has favored buyers so far, but that doesn’t necessarily mean that homes are selling
- Existing-Home Sales Decline in April: In April 2025, existing-home sales fell by 2% year-over-year.
- New-Home Sales Decline Sharply: Similarly, in January 2025, new-home sales fell by 10.5%.
- Nationwide Home Listings Hit a Record of Nearly $700 Billion: Less activity from buyers has caused homes to sit on the market for longer periods of time. A recent report from Redfin shows that the total value of home listings has grown by more than 20% year-over-year due to the significant number of homes available for sale.