The frozen housing market

Since the COVID boom ended, sales have stalled. High borrowing costs, thin supply, and steep prices get most of the blame.

The hidden brake

A Pew Charitable Trusts study points at a fourth factor: the lending rules written after the 2008 crash are still filtering people out.

“These changes helped to reduce delinquencies and defaults but also made it more difficult for many Americans to qualify for a mortgage.”

The rules did work

Liar loans are gone and defaults sit at record lows. Only 4% to 5% of delinquent borrowers now default, down from 55% in the early 2000s.

The 600s got squeezed out

From 2005 to 2024, the share of mortgages going to borrowers scoring 600-699 fell 13.3 points to 22.3%. The 700-plus crowd gained 24.9 points.

“Although borrowers now take on more debt as a share of their income than ever before, they must have a pristine credit history to be approved.”

Credit scores reward age

Scores favor long histories and cash cushions, so they track age, income, and wealth. Young buyers, rural and lower-income families, and Black and Hispanic households absorb the hit.

“Others are excluded because of a thin or nontraditional credit history, or because the federal government's credit standards are historically high.”

Heading for a 1995 low

The 30-year rate hit 6.76% and existing home sales fell for a third straight month. Capital Economics expects rates above 7% and sales near 4 million, the worst year since 1995.