Small mortgages fall below 3 percent of originations as cheap inventory shrinks

The share of small mortgages with principal balances of $100,000 or less has fallen to less than 3% of all originations in 2025 and 2026, MPA Magazine reported. This represents a significant decline from 2013 and 2014, when these small mortgages accounted for more than 12% of all originations. [1]

Fixed origination costs are the primary driver behind the decline, along with a shrinking supply of affordable housing, according to data from a Realtor.com report cited by MPA Magazine. The data shows that home purchases priced at $150,000 or less made up 36.7% of all sales in 2013. [1]

Home Mortgage Disclosure Act data from the Federal Financial Institutions Examination Council shows that the market share for homes priced at $150,000 or less fell to 8.8% by 2026, MPA Magazine reported. [1]

The U.S. subprime mortgage crisis occurred between 2007 and 2010 and contributed to the 2008 financial crisis. The federal government implemented intervention measures including the Troubled Asset Relief Program and the American Recovery and Reinvestment Act of 2009 to stabilize the financial system. [2]