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Home-purchase mortgage applications provide valuable insights into housing demand and market trends at both the national and local levels. Nationally, data on loan applications can help us understand whether affordability conditions are improving and the direction of the overall economy’s health. Locally, data from metropolitan areas can help REALTORS® gauge how many households are seeking to buy a home and identify markets with growing opportunities.

Data from the Home Mortgage Disclosure Act (HMDA) show that home-purchase mortgage applications fell to a historic low in 2023. Since 2024, however, demand has strengthened as application activity has steadily increased.

Between 2024 and 2025, the number of home-purchase applications increased by 2.0%, rising from 6.55 million to 6.68 million nationwide. This growth resulted in 3.6 million mortgages originating in 2025, up from 3.52[NE1.1] million in 2024. Looking at the most recent data, a key factor behind the growth was the mild decline in borrowing rates. In 2025, the average mortgage interest rate was 6.4%, down from 6.6% just one year earlier. In 2025, the typical mortgage applicant had a median income of $109,322, sought a median loan amount of $303,921, and aimed to buy a property with a median value of $371,462.

In 2025, the typical mortgage applicant had a median income of $109,322, sought a median loan amount of $303,921, and aimed to buy a property with a median value of $371,462.

 

Loan Applications:

In 2025, nearly 80% of the major metropolitan areas in the U.S. saw an increase in home-purchase loan applications (compared to 65% in 2024):

  • The most notable improvement was seen in Decatur, IL, where the number of applications grew by 17.3%.
  • Abilene, TX, also posted a 17.3% increase in applications, followed by Billings, MT, with a 13.8% gain.
  • In contrast, the largest loss was an 11% drop in Port St. Lucie, FL.
  • Lakeland-Winter Haven, FL (-8.4%), and Las Vegas-Henderson-Paradise, NV (-7.9%), recorded the next-largest declines.
  • Similar to 2024, six of the top 10 areas with the largest losses were in Florida.
  • Among the largest metro areas in the country, six areas experienced an increase in demand: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (3.8%), Chicago-Naperville-Elgin, IL-IN (3.6%), New York-Newark-Jersey City, NY-NJ (3.4%), Washington-Arlington-Alexandria, DC-VA-MD-WV (2.0%), Phoenix-Mesa-Chandler, AZ (1.6%), Houston-Pasadena-The Woodlands, TX (1.5%), and Los Angeles-Long Beach-Anaheim, CA (0.6%).

 

Mortgage Interest Rates:

Since the last quarter of 2023, mortgage rates have been steady at 6.5%–7%. Overall, 212 metro areas (about 97%) saw a decline in local average mortgage rates in 2025.

  • The largest rate drop occurred in Sherman-Denison, TX, where the average interest rate decreased by almost 0.39 percentage points.
  • Sherman-Denison was followed by rate decreases in Greeley, CO (-0.37 percentage points), and Durham-Chapel Hill, NC (-0.35 percentage points).
  • In contrast, Minneapolis-St. Paul-Bloomington, MN-WI, and Bismarck, ND, saw the largest rate hikes, each at 0.06 percentage points.
  • In third place was Hagerstown-Martinsburg, MD-WV, with a rate increase of 0.04 percentage points.
  • In total, only six metropolitan areas experienced rate hikes in 2025.

 

Loan Originations:

While loan applications highlight trends in housing demand, loan originations reflect households’ ability to secure financing in a specific market. We measure this ability by calculating the share of applications that result in a home-purchase loan.

In 2025, approximately 54% of applications turned into loans (unchanged from 2024).

  • Areas with the largest increases in the share of originations included Iowa City, IA (4.77 percentage points), Little Rock-North Little Rock-Conway, AR (4.04 percentage points), and Burlington-South Burlington, VT (3.87 percentage points).
  • Meanwhile, the area with the largest decline in loan originations was Elmira, NY, with a decrease of 4.85 percentage points between 2024 and 2025.
  • Bismarck, ND, which was in second place for the largest rate decreases, experienced a decline in originations of 4.51 percentage points.

 

 

Although mortgage applications have been rising, activity remains below pre-pandemic levels. In 2019, nearly 8 million individuals applied for home-purchase loans, resulting in 4.5 million originations. Financing conditions have also tightened as 56.7% of applications were converted into loans in 2019, compared with only 53.7% in 2025. The main factor is likely the higher cost of borrowing. The average mortgage interest rate in 2019 was 4.9%, but by 2025 it had risen to an average of 6.4%.

Still, thanks to steady rates between 2024 and 2025, market conditions continue to improve, opening a window of opportunity for many potential home buyers.

When it comes to financing a home, REALTORS® may want to watch trends in both loan applications and originations. Mortgage applications signal demand, reflecting people’s intent to buy a home, while originations measure effective demand, reflecting how many potential clients secured financing and completed a loan. Demand matters, but originations vary geographically and depend on additional factors, such as denial rates, affordability conditions and lending standards. To really understand demand in a local market, we need to consider the evolving relationship between loan applications and originations.