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

Securing a mortgage of $100,000 or less has become a daunting task, even when compared to more substantial loan amounts, according to a recent report from Realtor.com. The share of homes sold for under $150,000 has dwindled from 36.7% in 2013 to 8.8% in 2026, but the decline in small mortgage originations has been even more pronounced, suggesting that there are underlying structural barriers hindering buyers, says Joel Berner, a senior economist at the Austin-based real estate site.

"The difficulty in obtaining financing for small mortgages is not solely due to the scarcity of lower-priced homes; the challenges associated with financing itself are becoming more pronounced," Berner stated.

Beren attributed this trend to the costs and complexity involved in originating modest loans, which can serve as significant obstacles for potential buyers. However, there is a glimmer of hope on the horizon. The recently enacted 21st Century ROAD to Housing Act, signed into law in July despite President Donald Trump's initial refusal to endorse it, aims to alleviate some of the barriers preventing buyers of lower-priced homes from entering the market.

This legislation not only seeks to expand access to small mortgages but also targets the fixed costs and delays linked to small loans that may be stifling activity in this segment of the mortgage market. "The 21st Century ROAD to Housing Act represents a crucial step toward addressing these barriers by tackling the fixed costs, fee structures, and appraisal challenges that can render small mortgages economically unviable for lenders," Berner explained.

Rural America, where a significant portion of low-priced homes are located, bears the brunt of this challenge. Nationwide, 7.7% of mortgages issued in rural ZIP codes in 2025 had principal balances of less than $100,000. This percentage was notably higher in states such as Iowa, Wyoming, Mississippi, and West Virginia. Prospective buyers of affordable homes in rural areas face significant hurdles when it comes to securing financing, which can detrimentally impact these housing markets.

Even if these borrowers possess a credit profile comparable to those purchasing higher-priced homes and have larger down payments, they still endure considerably higher mortgage rates, as highlighted by the Realtor.com analysis. "By making it simpler to originate these loans responsibly, more buyers could gain access to lower-priced homes, particularly in rural communities where small mortgages continue to play a vital role in the market," Berner concluded.