Home purchase loans are sinking to their lowest level in 12 years as high mortgage rates crush affordability

US home loans fell to a twelve-year low in early 2026, driven by rising house prices and mortgage rates that remained stuck above 6%, sidelining many potential buyers.

According to the report, approximately 581,000 residential mortgages were originated between January and March 2026, a decline of 19% from the previous quarter. Q1 2026 US Residential Mortgage Production Report from a real estate data company ATOM.

This is the lowest quarterly total since early 2014 – a period when severe winter weather and a drop in exports caused a sharp and unexpected contraction in the US economy.

The latest data shows that the slowdown wasn’t 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 total volume of $577.7 billion.

“Purchase, refinancing and home loans all showed declines from the previous quarter, continuing a seasonal trend we have seen at the beginning of the year for the past four years,” says Rob KapperCEO of ATTOM. “However, purchasing activity stood out, with home loans falling to a 12-year low as higher house prices and higher mortgage rates continued to put pressure on affordability for many buyers.”

Purchase loans totaled nearly $237 billion in the first quarter, down 18% from Q4 2025 and down 8% year over year.

Rising mortgage rates are causing hesitation

According to data from Freddie Mac, while the average interest rate on a 30-year mortgage was 6.16% at the start of the year, it rose 30 basis points to 6.46% in early April, putting further pressure on an already tense housing market.

“Rates are down from their peaks, but when you combine continued lock-in, still-scarce inventory, prices that remain near record highs and geopolitical uncertainty, you get a market where most buyers are hesitant to take the plunge,” says Realtor.com® senior economist Hannah Jones.

At the local level, home lending fell quarter-on-quarter in 96.5% of the 200 metros analyzed by ATTOM, while purchasing activity fell in 99% of them.

Jones says the widespread nature of the decline indicates the first-quarter slump is not “a regional weakness, but an almost market-wide freeze.”

The steepest quarter-over-quarter declines in purchasing activity among major metros occurred 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 declines in overall home loans.

“These are established markets with limited supply, without relief valves, such as new construction, that can ease price pressure and keep the market well supplied and moving,” says Jones. “In the metropolises with the most severe supply constraints, there is simply nothing to buy and therefore nothing to finance.”

In the case of Honolulu, Jones says the metro is facing a different set of pressures: Rising insurance premiums, HOA fees and new flood map designations are eating up any relief that lower mortgage rates might otherwise provide.

The only metro areas where purchasing activity did not decline 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 fell 12% from the last quarter for a total of 272,156 new loans.