Optimism on the horizon for 2025 mortgage-lending activity 

COLLEGE STATION – The latest Texas Residential Mortgage Survey (TRMS) indicates the pace of residential mortgage lending activity has remained muted going into 2025. Overall origination loan volumes for January were down from the previous month, with purchase originations and rate/term refinancing loans showing the most declines. Cash-out refinances also dropped slightly.   

“One encouraging development, however, is that prospective homebuyers seeking pre-approvals have increased in January, reflecting consumer optimism going into the new year,” said Daniel Oney, Ph.D., research director at the Texas Real Estate Research Center (TRERC) at Texas A&M University. 

General business activity declined in January, while the business outlook for the next six months has improved since the October survey, echoing a broad optimism on the economic outlook.   

Mortgage rates increased in January and are generally expected to increase even more in the next six months. With the Federal Reserve’s announcement in January to leave the federal fund rate unchanged before its March meeting, mortgage bankers’ expectations matched the latest policy development that the mortgage rates are not going to come down anytime soon to provide meaningful relief for consumers.  

“December sentiment is not surprising given the MBA’s reports of declining applications and the steady rise in interest rates throughout the month,” said Interlinc Mortgage Services COO Erin Dee. “A bright line is the continued optimism for improvement in overall business going into 2025 with purchase activity leading the way.  

“The results also continue the trend seen last month of the general expectation of reduced regulatory burden in the coming months, thanks to the incoming Trump administration. With many major housing-related appointments, including at the FHFA and CFPB, the velocity of regulatory change is still unknown, but there is a consensus that relief is on the horizon for real estate finance and related fields.”   

The TRMS is a collaborative effort between the Texas Mortgage Bankers Association (TMBA) and TRERC to provide analysis of conditions and changes in the residential mortgage industry. Designed as a monthly sentiment survey to gauge current conditions and expectations in and around the Texas residential mortgage industry, all TMBA members are invited to participate.