U.S. home purchase lending plunged to its lowest level in 12 years at the start of 2026, dragged down by elevated home prices and mortgage rates stuck above 6% that sidelined many prospective buyers.
Roughly 581,000 home purchase loans were originated from January through March 2026, down 19% from the previous quarter, according to the Q1 2026 U.S. Residential Property Mortgage Origination Report from real estate data firm ATTOM.
This marks the lowest quarterly total since the beginning of 2014—a period when severe winter weather and a decline in exports triggered a sharp and unexpected contraction of the U.S. economy.
The latest data shows that the slowdown was not limited to typical buyers: Total residential mortgage originations, including purchases, refinances, and home equity lines of credit (HELOCs), shrank 13% quarter over quarter to 1.57 million with a total volume of $577.7 billion.
“Purchase, refinancing, and home-equity lending all posted declines from the previous quarter, continuing a seasonal trend we’ve seen during the start of the year over the past four years,” says Rob Barber, CEO of ATTOM. “However, purchase activity stood out with home-buying loans falling to a 12-year low, as elevated home prices and higher mortgage rates continued to strain affordability for many buyers.”
Purchase lending totaled nearly $237 billion in the first quarter, down 18% from the fourth quarter of 2025 and down 8% year over year.
Rising mortgage rates trigger hesitation
According to data from Freddie Mac, while the average rate on a 30-year fixed mortgage was 6.16% at the start of the year, by the first days of April, it surged 30 basis points to 6.46%, piling additional pressure onto an already strained housing market.
“Rates have moderated from their peaks, but when you layer persistent lock-in, still-scarce inventory, prices that remain near record highs, and geopolitical uncertainty, you get a market where most buyers are hesitant to make the leap,” says Realtor.com® senior economist Hannah Jones.
At the local level, residential lending declined quarter over quarter in 96.5% of the 200 metros analyzed by ATTOM, while purchase activity fell in 99% of them.
Jones says the widespread nature of the decline signals that the first-quarter slump is not “a regional soft patch but a nearly marketwide freeze.”
The steepest quarterly drops in purchase activity among large metros were in St. Louis (-43.5% quarter over quarter), Rochester, NY (-38.6%), Pittsburgh (-28.7%), Boston (-19.3%), and Honolulu (-16.1%).
Notably, St. Louis, Rochester, and Pittsburgh also saw the biggest pullback in total residential lending.
“These are supply-constrained, established markets without the release valves, like new construction, that can soften price pressure and keep the market well-stocked and moving,” says Jones. “In the most severely supply-constrained metros, there is simply nothing to buy and therefore nothing to finance.”
In the case of Honolulu, Jones says the metro faces a different set of pressures: rising insurance premiums, HOA fees, and new flood map designations are eating up whatever relief lower mortgage rates might otherwise provide.
The only metros where purchase activity did not fall in the first quarter were Yuma, AZ (up 28.6%) and Tucson, AZ (up 5.9%).
Meanwhile, refinancing activity fell 7% quarter over quarter to 715,818 loans originated in the first quarter, while HELOCs were down 12% from the last quarter, totalling 272,156 new loans.
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