A $100,000 mortgage can be harder to get than a much bigger one. Here’s why

Getting your foot in the door of one of the lowest-priced homes on the market has become increasingly challenging—and rising prices are only partly to blame.

Financing options for a mortgage with a principal balance of $100,000 or less are increasingly harder to come by or carry much higher rates, according to a new report from Realtor.com. While the share of homes that have sold for $150,000 or less has shrunk considerably—from 36.7% in 2013 to 8.8% in 2026—the share of small mortgage originations has declined even faster, indicating structural barriers at play are affecting buyers, according to Joel Berner, senior economist at the Austin-based real estate site. 

“Small mortgages are not simply fading because lower-priced homes are harder to find; the financing itself has become harder to access,” Berner said in a statement. The faster decline in small mortgages relative to their sales, he says, “points to a market where the costs and complexity of originating a modest loan can stand between buyers and an attainable home.”

But there may be reason to be optimistic.

That’s because the 21st Century ROAD to Housing Act, which became law in July after President Donald Trump refused to sign the bill, may help to address some of the barriers that are keeping buyers of lower-priced homes on the sidelines. In addition to provisions that intentionally expand access to small mortgages, the law also sets out to address some of the fixed costs and delays associated with small loans that might be limiting activity in this part of the mortgage market. 

“The 21st Century ROAD to Housing Act is an important step toward addressing those barriers by targeting the fixed costs, fee structures and appraisal challenges that can make small mortgages uneconomic for lenders,” Berner said. 

WHY RURAL AMERICA IS BEING HURT

Depending on where you live, the idea of buying a home for less than $150,000 may seem like a fever dream, particularly with the nationwide median listing price currently at $424,500.

But rural America is home to the bulk of these low-priced homes, and that’s where small mortgages are most prevalent. Nationwide, 7.7% of mortgages issued in rural ZIP codes in 2025 had principal balances of less than $100,000 in 2025—and the share was even higher than that in Iowa, Wyoming, Mississippi, and West Virginia.

When prospective buyers of low-priced homes in rural areas face challenges obtaining financing, it can weigh on these housing markets. And even if these borrowers come to the table with a comparable credit profile as their counterparts buying higher-priced homes—and significantly larger down payments—they consistently pay much higher mortgage rates, according to the analysis by Realtor.com. 

“Making it easier to responsibly originate these loans could help more buyers finance lower-priced homes, particularly in rural communities where small mortgages remain an important part of the market,” Berner said.