Pew study links tight mortgage standards to 31-year low in US home sales

September 13, 2026 at 04:04 AM2 min

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Stricter post-crisis mortgage standards are excluding moderate-credit borrowers from the US housing market, according to a Pew Charitable Trusts study. The share of originations to borrowers with credit scores of 600-699 fell 13.3 percentage points from 2005 to 2024. The findings come as existing-home sales fell 2% in August to a seasonally adjusted annual rate of 3.98 million units.

Key Facts

The share of mortgage originations to borrowers with credit scores of 600-699 fell 13.3 percentage points to 22.3% from 2005 to 2024.
The share of originations to borrowers with credit scores of 700 or higher rose 24.9 percentage points over the same period.
Only 4%-5% of delinquent borrowers now default, down from 55% in the early 2000s.
The 30-year fixed mortgage rate rose to 6.76% from 6.71% last week, the highest since June 2025.
Existing-home sales fell 2% in August to a seasonally adjusted annual rate of 3.98 million units, the National Association of Realtors reported.

Credit Score Shift

From 2005 to 2024, the share of mortgage originations to borrowers with credit scores of 600-699 fell 13.3 percentage points to 22.3%. Over the same period, the share to borrowers with scores of 700 or higher rose 24.9 percentage points. Pew's Adam Staveski wrote that borrowers now take on more debt as a share of income than ever before, yet must have a pristine credit history to be approved. Credit scores correlate closely with age, income, and wealth, so tighter standards disproportionately hit young adults, lower-income families, rural communities, and Black and Hispanic households.

Market Conditions

The benchmark 30-year fixed mortgage rate rose to 6.76% from 6.71% last week, Freddie Mac reported Thursday. That is up from 6.35% a year ago and the highest since June 2025. The National Association of Realtors said existing-home sales fell 2% in August from July to a seasonally adjusted annual rate of 3.98 million units.