By DON FENLEY

The Tri-Cities housing finance market ended 2025 on firmer footing than a year earlier, even as fourth-quarter activity softened seasonally and long-standing differences between Johnson City and Kingsport–Bristol came into sharper focus.

That contrasts with ATTOM’s Residential Property Mortgage Origination Report, which shows that 1.72 million mortgages secured by residential property were issued in the fourth quarter of 2025. The quarter to quarter volume was down 6% while the year to year was level of loans originated at the same time last year.

The Johnson City metro area recorded 1,270 total loans in Q4 2025, up 22% from a year earlier. Kingsport–Bristol posted 1,838 loans, an 8% annual increase. Both markets slipped modestly from Q3, consistent with typical year-end patterns.

ATTOM CEO Bob Barker summarized the Q4 U.S. data by saying, “Loans, particularly for new purchases, typically slow down in the fourth quarter as fewer people are buying houses. But this year, that seasonal slowdown was offset by a rise in refinancing, likely driven by the steady drop in mortgage rates, which have been some of the lowest we’ve seen since 2022.”

Total lending rose in both local metros compared with Q4 2024, signaling renewed engagement from buyers and homeowners after two years of rate-driven hesitation. Still, momentum cooled late in the year, pointing to stabilization rather than acceleration.

Johnson City recorded 1,270 total loans in Q4 2025. Kingsport–Bristol posted 1,838 loans. What stands out is not just the recovery, but how differently each metro is behaving.

Johnson City: Refinancing Rebounds, Buyers Remain Selective

Johnson City’s improvement was driven largely by refinancing and steady purchase demand.

Refinance volume increased 22.4% year over year in Q4, signaling homeowners are responding to incremental rate relief by restructuring debt and stabilizing monthly obligations. The activity reflects financial repositioning rather than aggressive borrowing.

Purchase loans rose 10.9% from a year earlier, confirming buyer interest remains intact despite affordability pressure. However, volumes eased from Q3, underscoring growing selectivity as households weigh pricing and borrowing costs.

HELOC activity increased 10.9% year over year but declined 12.9% quarter over quarter. That suggests homeowners remain willing to use equity but are becoming more cautious heading into 2026.

Overall, Johnson City reflects a price-sensitive, professional-driven market with improving conditions paired with disciplined behavior.

Kingsport–Bristol: Volume Leader With Measured Expansion

Kingsport–Bristol continues to anchor regional lending volume.

Total loans increased 8.1% year over year in Q4, reinforcing its role as the Tri-Cities’ primary transaction engine. Purchase activity rose 4.9% annually and softened modestly from Q3, pointing to steadier demand compared with Johnson City.

Refinance lending expanded at a moderate pace, mirroring broader regional sensitivity to rate movements.

HELOC usage rose 4.9% from a year earlier but slipped 2.5% quarter over quarter, indicating that while equity remains accessible, homeowners are moderating leverage decisions.

Kingsport–Bristol operates as the region’s larger, equity-responsive market. It’s broader in scale, more cyclical, but showing restraint rather than speculation.

A Market in Transition

By the close of 2025, the Tri-Cities lending environment had clearly moved beyond the freeze that followed the 2022–2023 rate spike.

Refinancing and HELOC improved. Purchase activity held. Total lending expanded.

At the same time, quarter-over-quarter softening in equity borrowing highlighted rising household caution. The data points to recalibration, not retreat.

Johnson City shows stronger annual growth but sharper seasonal pullbacks, reflecting affordability pressure. Kingsport–Bristol shows broader volume and steadier demand, though with more moderate growth rates.

Together, they signal a housing finance market entering 2026 more balanced and transaction-oriented. The balance and transaction orientation is  characterized by selective buyers, cautious equity usage, and homeowners focused on financial optimization rather than expansion.

Then vs. Now: A Six-Year Lending Reset

A comparison of Tri-Cities loan activity between the pre-pandemic level Q4 2019 and Q4 2025 underscores how dramatically the market has reshaped since the pre-pandemic period.

Total loans climbed from 2,734 in Q4 2019 to 3,108 in Q4 2025, confirming that overall lending volume now exceeds pre-COVID levels. Refinance activity rose from 1,162 to 1,411, reflecting households actively repositioning debt in response to changing rate conditions.

Purchase loans increased from 1,072 to 1,263, signaling structurally stronger housing demand driven by population growth and new household formation across the region.

HELOC activity, however, moved in the opposite direction — declining from 500 to 434 — reinforcing a key theme of today’s market: homeowners are borrowing more selectively against equity even as total lending rebounds.

Categories: REAL ESTATE