US mortgage refinancing surged 86% in 2025 as rates eased from 2023 highs

Mortgage refinancing activity jumped 86% year-over-year by December 2025, according to the Mortgage Bankers Association’s weekly application data, as rates eased from the nearly 7.8% peak reached in late 2023. Purchase applications also grew, up 13% year-over-year, though the overall housing market remained far slower than the ultra-low-rate years of 2020 and 2021.

The National Association of Realtors projected a 14% nationwide increase in home sales for 2026, citing job growth, rising inventory and a modest decline in mortgage rate forecasts as the main drivers. Economists cautioned that regional differences would remain pronounced heading into the new year, with demand favoring areas offering both job opportunities and relative affordability, while home price growth was expected to stay below the long-running historical average of 4% to 5%.