Mortgage Rates Fall to Nine-Month Low Amid Economic Uncertainty

• Mortgage rates dipped again this week, with 30-year fixed-rate loans averaging 6.61%, the lowest since October 2024, according to Bankrate’s latest survey.

• This downtrend may benefit borrowers, but rates are still materially higher than pre-pandemic levels, keeping affordability stressed.

• Analysts expect continued rate volatility as the Fed weighs inflation and economic data.

June 2025 Housing Market Trends Report

• U.S. active housing inventory rose 28.9% year over year in June, marking the twentieth consecutive month of gains.

• The national median list price held steady at $440,950, up just 0.2% from last year, with over 20% of listings reporting a price reduction.

• The Midwest and Northeast remain tight, while inventory recovery is strongest in the West and South.

US Fixed Housing Affordability Index Falls Further

• The Housing Affordability Index dropped to 97.20 in May 2025, a 3.8% decline from April and over 5% higher than a year ago, per National Association of Realtors data.

• This marks renewed strain on homebuyer capacity, despite moderate listing price movement.

• Persistently high mortgage rates are offsetting any modest income or price improvements.

Mortgage Origination Activity: Volumes, Channels, and Borrower Mix

• Originations for new home purchases and refinances held steady in Q1 2025, with the CFPB reporting ongoing growth among fintech and nonbank lenders.

• Super-prime borrowers dominate, comprising nearly 79% of new mortgages.

• Geographic differences remain, with the South and West showing the strongest origination activity.

Mortgage Delinquencies Decrease Slightly in Q2 2025

• The national mortgage delinquency rate fell to 3.93% in Q2 2025, per MBA’s latest report.

• Serious delinquencies rose for government-backed loans, yet overall rates remain below long-term averages.

• The labor market’s softness and rising debt suggest caution as 2025 continues.

First-Time Buyers Drive Purchase Activity Despite Headwinds

• First-time homebuyers now account for a record share of agency purchase lending, led by Gen Z and FHA borrowing.

• Repeat buyers, constrained by “golden handcuff” low-rate mortgages, remain sidelined.

• Fintech platforms and end-to-end digital mortgages are fueling new growth and competition.

Technology Trends Reshape Mortgage Workflows

• AI, machine learning, and automation tools have become essential, allowing for faster and more accurate underwriting, credit assessment, and customer service.

• Digital closings and e-notarizations are now mainstream, with regulatory compliance and digital literacy top priorities for lenders and agents alike.

• Enhanced CRMs and predictive analytics are aiding firms in anticipating client needs and trends.

Policy and Regulatory Shifts Intensify Compliance Demands

• Regulatory bodies have brought new rules in 2025, requiring tighter verification, reporting, and transparency in loan origination, processing, and servicing.

• These changes aim to stabilize the market following economic volatility and to protect borrowers, especially in underserved markets.

• Staying compliant and proactive is a competitive necessity as digital transformation accelerates.