Housing affordability tops list of priority for mortgage lenders heading into 2025

Housing affordability and inventory top the list for mortgage lenders heading into 2025.

In an exclusive report published by Arizent, parent company of National Mortgage News, 41% of home finance professionals list qualified home buyers as the number one challenge of 2025 and 16% listed it as the second biggest challenge.

It’s not that buyers aren’t necessarily qualified, its that homes have become so expensive that approval is out-of-reach for most new homeowners. And, with continued low inventory, there just aren’t many starter homes entering the market. In a three-year period between October 2021 and 2024, housing prices accelerated 21.6%, according to the Federal Housing Finance Agency.

Mortgage rates hovering over 7% are a massive factor as well, making mortgages increasingly out-of-reach for many home buyers.

With the recent spate of natural disasters in California, Oregon, Florida, and North Carolina, homeowner’s insurance is double, or even triple, in some areas.

To meet these challenges, one fifth of industry professionals say that they would be willing to lower down payment requirements and look at other sources of income to help qualify home buyers.

With over 70% of current home owners locked into an interest rate of 5% (or lower), more and more people are sitting on their homes and waiting for interest rates to lower to the 5% range. This translates directly to a lack of inventory and rising house costs.

Burdensome regulations in some states mean that home building has become more costly, time-consuming, and bureaucratic. Lessening unreasonable regulations will allow builders to build, increasing inventory, and lowering prices.

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