Quarterly mortgage market summary
Agency mortgage securitizations increased 11% in the fourth quarter (Q4) 2025 on a year-over-year basis, representing the highest level of securitization volume since Q3 2022. Securitization volumes of new agency mortgages (Fannie Mae, Freddie Mac, and Ginnie Mae) were $357 billion for Q4, based on estimates from Milliman M-PIRe Securitization and Valuation Software.
The Mortgage Bankers Association (MBA) reports that mortgage lenders remained profitable during the quarter, with the average lender generating a profit of $674 for each loan originated in Q4 2025. The profit margin decreased from Q3 2025 following seasonal patterns but substantially outperformed the $40 loss for each loan originated in Q4 2024.
Agency mortgage loan delinquencies have risen year-over-year, increasing from 4.0% in Q4 2024 to 4.3% in Q4 2025.
Purchase and refinance origination trends
Based on data from Milliman M-PIRe, single-family agency mortgage securitizations rose 10.8% year-over-year from $322 billion in Q4 2024 to $357 billion in Q4 2025, consistent with the downward movement in rates. This increase was due to a pickup in refinance activity, which rose 37% year-over-year, whereas purchase mortgage activity decreased by 2% year-over-year. The 30-year mortgage rate was down 34 basis points from Q3 2025 and down 40 basis points year-over-year, averaging 6.23% in Q4 2025.
Figure 1: Agency mortgage securitizations ($ billions) and the 30-year mortgage rate
Source: Milliman M-PIRe, FRED
The Primary–Secondary (30-year mortgage to 10-year Treasury) spread was down 22 basis points year-over-year and down 18 basis points from Q3 2025, continuing the downward trend that began in Q2 2023. The Primary–Secondary spread has moved in general correlation with Treasury yields. If the correlation continues, a decrease in those yields will create additional mortgage rate relief as the spread also decreases.
Figure 2: The primary–secondary spread
Source: FRED
Existing home sales increased in Q4 2025, with year-over-year sales up 2%. This increase can be attributed to New Home Sales, which rose 7% year-over-year. Both single-family housing permits and starts were down 9% and 12%, respectively, in Q4 2025 on a year-over-year basis, indicating potential headwinds as new and existing home inventory continues to grow.
Figure 3: Existing and new home sales annualized (millions)
Source: Moody’s Analytics
Figure 4: Single-family starts annualized (millions)
Source: Moody’s Analytics
According to the MBA, applications to refinance a home were up 94% from Q4 2024 to Q4 2025, driven by a drop in interest rates. Applications for purchase were up 19%, consistently above levels observed in 2023 and 2024 during the same period. Notably, application volumes for both purchase and refinance mortgages are demonstrating growth that meaningfully exceeds securitization growth.
Figure 5: MBA refinance application index (by week)
Source: MBA
Figure 6: MBA purchase application index (by week)
Source: MBA
Mortgage lenders and their financial performance
In Q4 2025, mortgage lenders earned $674 for every loan originated in the quarter, a material increase from the $40-per-loan loss in Q4 2024. This improvement in lender profitability is another indicator that lenders have recovered from the difficult years of 2022, 2023, and 2024.
Figure 7: Net income per originated loan
Source: MBA
Consumer health and the lending environment
The overall economy remains resilient, with the unemployment rate ending Q4 2025 at 4.4%, unchanged from the end of Q3 2025.1 Total household debt continues to increase, with the total consumer debt load rising 7.3% from Q4 2024 to Q4 2025.2 Indications of a K-shaped economy, where the affluent are thriving but mid- to low-income workers are struggling, are becoming more prevalent, but evidence to confirm this happening remains elusive according to the Federal Reserve Bank of Minneapolis.3 Agency mortgage loan delinquencies ended 2025 at 4.4%, the highest rate in over three years.
Figure 8: Conventional and government delinquency rate (30, 60, 90+ days delinquency excl. foreclosure)
Source: Moody’s Analytics
At the conclusion of Q4 2025, according to the University of Michigan’s Surveys of Consumers, consumers’ expectations regarding inflation in five years had decreased to 3.2% compared to 3.7% in Q3 2025, but remained elevated from the year prior.
On an annual basis, home prices rose just 1.6% in Q4 2025 but demonstrated a small uptick in quarterly growth relative to the previous two quarters.
Figure 9: Federal housing and finance agency purchase-only home price index (base of 100 in Q1 1991)
Source: Moody’s Analytics
1 Graphics for Economic News Releases. (n.d.). Civilian unemployment rate. U.S. Bureau of Labor Statistics. Retrieved on March 26, 2025, from https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm.
2 Center for Microeconomic Data. (2025, Q4). Household debt and credit report. Federal Reserve Bank of New York. Retrieved on March 20, 2026, from https://www.newyorkfed.org/microeconomics/hhdc.html.
3 Horwich, J. (2026, March 20). Have U.S. consumers gone “K-shaped”? A review of the data. Federal Reserve of Minneapolis. Retrieved on March 20, 2026, from https://www.minneapolisfed.org/article/2026/have-us-consumers-gone-k-shaped-a-review-of-the-data.