PMI Trends Signal a Strong Purchase Market Heading Into 2027

The latest mortgage data shows purchase lending is picking up steam, even as refinance activity cools — a trend California homebuyers should understand heading into the new year.

The latest mortgage market data tells an interesting story: purchase lending is gaining momentum, while refinance activity has taken a sharp step back. For anyone thinking about buying a home in California, this is worth understanding.

In the third quarter of 2026, Fannie Mae and Freddie Mac securitized nearly $80 billion in loans backed by private mortgage insurance — a modest overall increase from the prior quarter. But dig into the details and it gets more telling: purchase mortgages with private MI surged nearly 16% quarter-over-quarter, while refinance volume with MI collapsed by more than 65%.

FHA lending told a similar story — purchase volume rose over 7%, while FHA refinances dropped sharply.

What does this mean for you? It confirms that the market is being driven by real buyers — people who need homes, not just homeowners chasing a lower rate. Inventory and affordability remain the main challenges in California, but buyer demand is clearly still there.

If you're planning to buy in the next few months, competition may be steadier than you'd expect. And if you're a first-time buyer using FHA or low-down-payment conventional financing, understanding how PMI works — and how to get rid of it faster — can save you thousands over the life of your loan.

Ready to explore your options? Contact our team today to get pre-qualified and find the loan program that fits your goals.