2025 Mortgage Trends and Foreclosure Rates

• National home value growth slows, with prices falling in nine of 20 major metro areas.

• U.S. home prices rose just 1.5% in August from a year earlier — the weakest pace since 2023.

• Homeowners lose ground to inflation, while easing mortgage rates offer buyers some relief.

Home buyers who have remained patient and kept socking away cash are finally being rewarded. The latest data show the housing market continued to cool in August, with national home prices rising just 1.5% compared to a year earlier.

According to the latest S&P CoreLogic Case-Shiller Home Price Index, that marks a slowdown from July’s 1.7% increase and represents the slowest annual growth since 2023, when prices briefly dipped.

But perhaps more important for buyers, nine of the 20 major metro areas tracked by the index saw year-over-year price declines, signaling that the market’s post-pandemic surge continues to lose steam.

“August's data shows U.S. home prices continuing to slow,” said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices. “For the fourth straight month, home values have lost ground to inflation, meaning homeowners are seeing their real wealth decline even as nominal prices inch higher.”

The 1.5% rise in home values trails the 2.9% inflation rate over the same period — meaning home prices are falling in real, inflation-adjusted terms.

Northeast and Midwest hold firm

The slowdown isn’t hitting all regions equally. Northeast and Midwest markets continue to post solid gains, while many Sun Belt and Western metros are seeing sharper corrections.

New York led all markets with a 6.1% annual price gain, followed by Chicago (5.9%) and Cleveland (4.7%). Meanwhile, Tampa recorded the largest drop among major metros, with values down 3.3% year-over-year — its 10th straight month of annual declines.

“Markets that experienced the sharpest pandemic-era gains are now seeing the largest corrections, while more affordable metros with stable local economies are holding up better,” Godec noted.

Realtor.com Senior Economist Anthony Smith said “markets in the Northeast and Midwest continue to perform relatively better, supported by tighter resale supply and steadier demand,” while many Sun Belt cities “are showing clearer signs of softening, with inventory recovering, homes taking longer to sell, and price cuts rising.”

Cooling prices, falling mortgage rates

For prospective buyers, the silver lining shines even brighter. Mortgage rates have fallen to their lowest level in over a year — 6.19%, according to Freddie Mac — as the Federal Reserve continues to ease its benchmark interest rate.

With inflation outpacing home value growth, falling borrowing costs, and a patchwork of local market conditions, the housing market appears to be entering a new equilibrium — one that could offer opportunities for patient buyers while testing the resilience of homeowners who bought at the peak.

• Mortgage rates drop to 6.26%, boosting affordability.

• Refinancing surges, now nearly 60% of mortgage applications.

• Fed cut expectations, weak job market drive rate declines.

Home affordability improved again this week. Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.26% this week.

“Mortgage rates decreased yet again this week, prompting many homeowners to refinance. In fact, the share of mortgage applications that were refinances reached nearly 60%, the highest since January 2022,” said Sam Khater, Freddie Mac’s chief economist. 

In fact, the Mortgage Bankers Association reported that mortgage applications increased 29.7% last week from one week earlier. Most of those were applications to refinance existing mortgages.

The Refinance Index increased 58% from the previous week and was 70% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 3% from one week earlier. 

“Indicative of the weakening job market, and in anticipation of a rate cut from the Federal Reserve, mortgage rates last week dropped to their lowest level since last October, with the 30-year fixed rate declining to 6.39%, said Mike Fratantoni, MBA’s chief economist. 

“Homeowners responded swiftly, with refinance application volume jumping almost 60% compared to the prior week.” 

Fratantoni said homeowners with larger loans jumped first, as the average loan size on refinances reached its highest level in the 35-year history of our survey. 

Latest rates

The 30-year FRM averaged 6.26% as of September 18, 2025, down from last week when it averaged 6.35%. A year ago at this time, the 30-year FRM averaged 6.09%.

The 15-year FRM averaged 5.41%, down from last week when it averaged 5.50%. A year ago at this time, the 15-year FRM averaged 5.15%.

• Mortgage rates dipped to 6.50%, the lowest in nearly a year.

• Pending home sales rose 1.6% year over year, but affordability challenges persist.

• Median monthly housing payments fell to $2,593, the lowest level since January.

Mortgage rates continued their downward path this week. Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averages 6.50%.

“Mortgage rates continue to trend down, increasing optimism for new buyers and current owners alike,” said Sam Khater, Freddie Mac’s chief economist. “As rates continue to drop, the number of homeowners who have the opportunity to refinance is expanding. In fact, the share of market mortgage applications that were for a refinance reached nearly 47%, the highest since October.”

Current rates

• The 30-year FRM averaged 6.50% as of September 4, 2025, down from last week when it averaged 6.56%. A year ago at this time, the 30-year FRM averaged 6.35%.

• The 15-year FRM averaged 5.60%, down from last week when it averaged 5.69%. A year ago at this time, the 15-year FRM averaged 5.47%.

As rates continue to fall, house payments become a little more affordable for home buyers. A new report from real estate brokerage Redfin shows the median housing payment is down to $2,593, the lowest it’s been in January.

Lower payments are beginning to spur more activity. Pending home sales rose 1.6% from a year earlier, continuing several weeks of steady growth. 

However, the rebound is modest. Home-sale prices climbed 1.6% year over year during the four weeks ending August 31, keeping affordability pressures high. Despite the recent dip, monthly payments remain 5% higher than they were a year ago.

“Mortgage rates haven’t come down significantly enough to bring back a flood of buyers,” said Mariah O’Keefe, a Redfin Premier agent in Seattle. 

She noted that while well-priced single-family homes in desirable neighborhoods are selling quickly, condos, townhouses, and homes that aren’t move-in ready are lingering on the market. Sellers, however, are increasingly willing to negotiate as demand remains subdued.

The supply side of the market also plays a role in stabilizing prices. While total homes for sale are up 11.3% from last year, that’s the smallest increase in 18 months. New listings rose just 1.1% year over year, as some homeowners are choosing to stay put rather than risk selling in a market where buyers remain cautious. With inventory declining from its summer peak, upward price pressure remains.

After decades of attempts to level the housing playing field, Black Americans still face a harder path to home ownership than whites, with Black applicants being 1.7 times more likely to be turned down.

Detroit and Grand Rapids, Mich., had the highest denial rates in the nationwide survey conducted for LendingTree.

High mortgage denial rates — along with limited generational wealth, income disparities and discriminatory practices — are among the persistent challenges that keep the Black home ownership rate lower than that of other racial groups.

But these disparities aren’t uniform. Denial rates — and the gaps between Black and overall applicants — vary widely across the country.

LendingTree chief consumer finance analyst Matt Schulz says a higher denial rate for Black consumers means limited access to the benefits of owning a home.

“For generations, homeownership has been one of the most powerful tools for building wealth that Americans have. Home ownership isn’t cheap, and there are ongoing costs; however, the equity that you can build over the years can be incredibly helpful. Not only can it provide you funding when you’re in a financial pinch, but it can also be used in working toward other financial goals,” Schulz says.

Key findings

Black homebuyer denial rate is 19.00% nationally

Black mortgage applicants are 1.7 times more likely to be denied a home loan than all homebuyers. In 2024, the mortgage denial rate for Black Americans was 19.00%, 7.73 percentage points higher than the denial rate for all applicants, 11.27%.

In what is perhaps a sign of progress, the denial rate disparity between Black and all mortgage applicants in the 50 largest metros decreased from 5.30 percentage points in 2022 to 4.80 percentage points in 2024.

Mortgage denial rates across 50 largest metros: All buyers vs. Black buyers

Source: LendingTree analysis of 2024 Home Mortgage Disclosure Act (HMDA) data.

While the difference in denial rates between Black homebuyers and all buyers has narrowed slightly, the home ownership gap remains wide. The national home ownership rate in 2023 was 65.2%, yet it was 44.7% among Black consumers — significantly lower than the rate among white (72.4%), Asian (63.4%) and Hispanic (51.0%) households.

During the housing market crash of 2009 there was a surge in foreclosures. Since then, foreclosures have been rare. Until last month.

ATTOM, a curator of real estate data, reports an 8% increase in foreclosure filings compared to the previous month, totaling 30,816 properties. While that’s a significant one-month jump, the company said the numbers reflect a 7% decrease from the same period last year, indicating a complex landscape for foreclosure activity as the year begins.

Rob Barber, CEO of ATTOM, commented on the findings, suggesting that the increase might partly be due to a post-holiday catch-up in filings. 

"It's too early to know if 2025 will shift from the general 2024 trends of a continued decline in foreclosure activity,” Barber said in a press release. “We will keep a close eye on the market to see how interest rates, inflation, employment shifts, and other market dynamics impact foreclosures in 2025." 

The report highlights a monthly increase in completed foreclosures (REO) in 30 states, with lenders repossessing 2,973 properties in January, marking a slight rise from the previous month but a significant 25% drop from the previous year. Notable increases in REOs were observed in Arizona (up 73%), Virginia (up 57%), and South Carolina (up 55%).

Cities with the most filings

Among metropolitan areas with populations over 200,000, Detroit led with 164 REOs, followed by Chicago and Riverside, Calif. The states with the highest foreclosure rates included Delaware, Nevada, and Indiana, with Delaware experiencing one foreclosure filing for every 1,839 housing units.

Foreclosure starts also saw an 8% increase from the previous month, with 20,994 properties entering the foreclosure process. However, this figure represents a 4% decrease from January 2024. Texas, California, and Florida led the nation in foreclosure starts, with significant activity also noted in major metropolitan areas like Chicago, New York, and Houston.

The foreclosures that caused the housing market crash were largely due to subprime mortgages and lax lending standards. It’s not clear what was behind January’s increase.