Even as borrowing costs continue to inch higher, Americans are continuing to prioritize refinancing their home mortgages over taking out loans to buy new properties.
In the first quarter, the number of refinancing originations outpaced new purchase loans for the second quarter in a row, according to a TRD Data analysis of Attom loan data. This trend had not occurred since early 2022, when mortgage rates hovered around 3.5 percent but were beginning to climb again.
“There’s a lot of pent-up demand from people that took out mortgages at higher rates in years past just waiting for rates to drop so they could refinance,” said Rick Sharga, a residential mortgage expert who founded the advisory firm CJ Patrick Company. “It really was all rate based.”
Mortgage rates began to slide toward the end of 2025, after the Federal Reserve slashed its benchmark interest rate three times. Rates, though, remain elevated and are on the rise again as the U.S. enters its fourth month of conflict with Iran. On Thursday, the average, 30-year fixed-rate mortgage rate hit 6.53 percent, the highest reading since August, according to Freddie Mac data.
Compared to the year before, refinance originations climbed 24 percent in the fourth quarter, though the activity slowed from the fourth quarter of 2025, as rates have begun to climb again.
Some of this activity could stem from borrowers with interest rates in the high 6 percent range, who were looking to cut down on their monthly mortgage payments. Some could also be cash-out refinancings, with homeowners taking advantage of lower rates to pay down other more expensive debt, Sharga said.
“It’s an incredibly rate-sensitive market right now,” he said.
Meanwhile, loans for new home purchases dropped by 12 percent year over year to hit a 12-year quarterly low, particularly as the beginning of the year was disappointing in terms of home sales, Sharga noted. The number of deals across the country dipped year over year in January, February and March, according to data from Redfin.
Still, the drop in new purchase loans does not signal doom, Sharga said. Almost every first quarter reading since 2021 has been lower than the year before, per Attom’s data.
“It’s not that [purchase originations] fell off a cliff compared to where we were a year ago,” he said. “It’s just a steady state of slow decline.