Mortgage lending has two big engines: home-purchase loans and refinances. Which one dominates tells you a lot about the rate environment — and in 2026 the answer is clear.
From HMDA data. Figures are the 2023 reporting year; this is informational, not advice.
The split today
| Loan purpose | Share of purchase + refinance originations |
|---|---|
| Home purchase | ~76% |
| Refinance (incl. cash-out) | ~24% |
Refinances are a minority of activity. That’s a direct consequence of rates sitting near 6.5% — far above the sub-3% lows of 2021 — so most homeowners already hold a cheaper loan than they could get today.
Why refinancing dried up
When rates fall, refinancing surges as borrowers swap into cheaper loans. When rates rise and stay high, the opposite happens: there’s no rate-and-term refinance to be had, and even cash-out refinances mean giving up a low rate on the whole balance. The result is the muted refinance share above.
The denial-rate twist
Purchase and refinance applications aren’t denied at the same rate. In many states the refinance denial rate is higher than the purchase rate — cash-out refinances strain debt-to-income and appraisal limits. Every state page breaks out both. Compare two states directly, like California vs Texas or Florida vs Texas.
What it means
For most buyers in 2026, the relevant question is the purchase payment, not refinancing. Estimate it on the mortgage calculator, and check the most-originations ranking to see which states are doing the most lending overall.
Sources
HMDA Data Browser (2023, public domain) for the purchase/refinance split; Freddie Mac PMMS for rate context. See our methodology.