Small mortgages are disappearing in a shrinking affordable market
More telling is the ratio of low-priced home sales to sub-$100,000 originations, roughly three to one before the pandemic, widened to nearly four to one by 2025 and 2026.
“Small mortgages are not simply fading because lower-priced homes are harder to find; the financing itself has become harder to access,” said Joel Berner, senior economist at Realtor.com in the United States.
“When the share of low-priced home sales is roughly four times the share of small mortgages, it points to a market where the costs and complexity of originating a modest loan can stand between buyers and an attainable home.”
Craig Riddell of LoanLogics says some homeowners are turning to HELOCs and home equity loans with the expectation that rates will fall, creating risks if borrowing costs remain elevated longer than anticipated. https://t.co/3rtvWTQEtl
— Mortgage Professional America Magazine (@MPAMagazineUS) October 7, 2026
Rural markets absorb the steepest impact
Iowa recorded the highest state share of small-balance originations in 2025 at 9.6%, followed by Wyoming (8.6%), Mississippi (8.5%), West Virginia (8.2%), and New Mexico (7.7%).
