03/09/2026
THE DISAPPEARING AMERICAN MORTGAGE
Young and working-class people arenât getting on the property ladder anymore.
MARCH 03, 2026â
By Annie Lowreyâ
âIf youâve secured a loan and you are closing on a new home in the near future, congratulations. Youâve taken part in an essential middle-class rite of passageâand youâre one of the lucky few.â
âThe mortgage, the cornerstone of wealth building for generations of Americans, is vanishing. Data from the Mortgage Bankers Association show that Americans are applying for fewer mortgages than they have at any point in the past quarter century, including during the worst of the Great Recession, when the jobless rate was more than twice as high. Since the end of 1999, 96 of the 100 lowest readings of the MBAâs weekly index of new mortgage-loan applications have occurred in the past three years.â
âThis overlooked trend has a few obvious causes. After the Great Recession, the Dodd-Frank Act tightened lending and underwriting standards. Mortgage lenders increased the amount of credit extended to wealthy households and reduced the amount of credit extended to middle-income households. (They did not change the amount of credit offered to low-income Americans, who are unlikely to buy a home anyway.) Banks focused more on providing suites of services to the well off, such as home loans, credit cards, and brokerage accounts, and less on making bread-and-butter loans to working families. The changes made the financial system safer, but also made buying a home harder for many people.
At the same time, the countryâs home builders sharply cut back on construction, producing a quarter as many properties in the early 2010s as they had before the Great Recession. Despite a recent uptick, theyâre still producing roughly 40 percent fewer today, causing the countryâs housing shortage to spread from the major coastal cities to smaller cities, suburbs, and rural areas. With supply constrained, prices shot up in the 2010s. The situation created winners. âFolks that bought, particularly pre-pandemic, have benefited from one of the biggestâ
âIn 2024, families needed an income of $126,700 to qualify for a median-price home, up from $79,600 in 2021, Chris Herbert, the managing director of Harvardâs Joint Center for Housing Studies, told me. âThat priced 8 million renters out of the market,â he said, noting that most renters make $50,000 to $60,000 a year.
Wealthy individuals and institutions became a stronger force. The portion of all-cash purchases rose 33 percent from 2020 to 2023. Cash buyers scooped up more than half of homes in New York City in the first six months of 2025. In West Palm Beach, Cleveland, and Miami, they made up more than a third of purchases. âMortgage desertsâ formed in disinvested neighborhoods, as well as in vacation towns and expensive cities, as real-estate-investment trusts and landlords scooped up âbuy low, rent highâ properties. In Baltimore, half of homes were purchased without a mortgage in 2022 and 2023, a report by Sharon Cornelissen, the director of housing at the Consumer Federation of America, found. In rural Hudspeth County, Texas, 98 percent were.â
âThe country still has twice as many homeowners as it has renters, and the homeownership rate is down only four percentage points from its George W. Bush-era high. Nevertheless, the share of Americans owning a home has not climbed in five years, despite the low unemployment rate, increase in wages, and boom in asset valuesâan unprecedented trend. Many younger families just canât get on the property ladder. In the 1980s, the typical first-time homebuyer was in their late 20s; now they are nearly 40, according to some surveys. In the countryâs 50 largest metro regions, only 3.1 percent of people under the age of 30 have a mortgage.â
âThe disappearance of the middle-class mortgage does not represent merely a short-term challenge for individual families. It portends major changes in the long-term financial security of the American middle class. The younger you are when you buy a property, the more time you have to develop equity and the more you benefit from rising real-estate prices. Imagine two people purchasing the same condo with the same loan terms, one at 28 and one at 48. If they both sell at 65, the latterâs settlement check will be only a third as big as the formerâs, assuming that home values increase 3 percent a year. Plus, mortgage costs are generally fixed for 30 years, whereas rent goes up annually, sometimes far faster than wages. âHousing wealth provides a lot of stability,â Herbert told me.
Nobody likes paying their mortgage. But many Americans are going to wish they had the chance to.â
