Property data curator ATTOM released its first-quarter 2025 Residential Property Mortgage Origination Report, which showed that 1.4 million mortgages were secured by residential property (one to four units) during the first quarter of the year. That was a 14 percent decrease from the previous quarter, as the number of new loans continues to trend downward.

After hitting a recent peak of nearly 4.2 million loans a quarter in early 2021, the number of new home financing deals has declined to below pre-pandemic levels, according to ATTOM. The latest dip was driven by a 20 percent drop in home purchase loans, which slipped from 738,675 in the fourth quarter to 593,111 in the first quarter.

The number of residential properties refinancing fell by 12 percent quarter-over-quarter, to 580,170, while home equity credit lines dipped 5 percent, to 260,267.

The total dollar value of loans fell 18 percent, from $582 billion in the fourth quarter to $478 billion in the first quarter, marking not only a decline in borrowers but also a decrease in the average loan amount. This is due in part to the shifting makeup of the loan market, according to ATTOM’s report.

Home purchase loans, which as recently as fall 2023 accounted for more than half of all mortgages, now comprise 41.4 percent of the market, a 2.8 percentage point drop from the fourth quarter. Meanwhile, the proportion of mortgage refinancing and home equity line of credit (HELOC) deals, which tend to be smaller, have grown to 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,” ATTOM CEO Rob Barber said in a release. “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. … If the current trend continues, mortgage refinancing deals will soon make up the biggest share of the home loan market.”

The metro areas with the biggest quarterly declines in refinancings were San Jose, Calif. (down 41.6 percent); Reno, Nev. (down 38 percent); Bend, Ore. (down 35.1 percent); San Francisco (down 34.2 percent); and Huntsville, Ala. (down 33.8 percent).

The metro areas with the largest increase in refinancings compared to the fourth quarter were Lubbock, Texas (70.4 percent); North Port-Sarasota, Fla. (up 52.6 percent); McAllen, Texas (up 49 percent); Brownsville, Texas (up 48.3 percent); and Asheville, N.C. (up 46.7 percent).

Besides San Jose and San Francisco, the metro areas with populations of more than 1 million that saw the biggest quarterly decline in refinancing packages were St. Louis (down 29.9 percent); Raleigh, N.C. (down 24.6 percent); and Boston, Mass. (down 23.7 percent).

FHA and VA mortgages down quarterly, up year-over-year. Lenders issued 227,159 loans backed by the Federal Housing Administration (FHA) in the first quarter of 2025. That was down 9 percent from the previous quarter but up 3 percent year-over-year. The share of FHA-backed loans as a percentage of all home loans rose quarter-over-quarter from 14.9 percent to 15.8 percent.

The number of loans backed by the U.S. Department of Veterans Affairs (VA) dropped to 78,862. That was 27 percent less than the fourth quarter but 8.4 percent higher year-over-year. VA-backed loans accounted for 5.5 percent of all loans in the first quarter of 2025.