Mortgage Update - July 14th, 2025
This weekend was brutal. Between the rain storms and the sauna-level humidity, Ash and I found ourselves battling nature with hundreds of wheelbarrows full of mulch and some seriously delayed landscaping plans. My body is definitely feeling it—every shovel, every step 😅
Needless to say, I’m trading mulch for mortgage talk this week… and I’ve got some big updates to cover 👇
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Read time: ~4 minutes
Big Win for Buyers: New Credit Score Approved for Mortgages
Fannie Mae and Freddie Mac just approved VantageScore 4.0, giving lenders a real alternative to FICO.
Since the news broke, FICO’s stock is down over 18%—a sign this change could be huge.
It could open the door for more buyers and change how lenders evaluate credit.
Here’s what it means 👇
✅ Will more people likely qualify for a mortgage?
Yes—especially renters, first-time buyers, and minority borrowers.
VantageScore 4.0 uses trended data and includes alternative payment history (e.g., rent, utilities, telecom bills), which helps:
Scorable US population is estimated at 96% vs. ~81% with FICO
As little as one month of credit history could generate a score vs. 6+ months with FICO
People with recent positive behavior but prior dings
Credit “invisibles” who have responsible financial patterns not captured by traditional models
Rent, utilities, phone must be reported in order to be included, adoption may take time
💸 Will rates go up or down because of this?
Generally, this won’t affect broader mortgage rates—but pricing could shift slightly depending on the borrower's profile.
As ya’ll know mortgage rates are driven mostly by macroeconomic forces: inflation, Fed policy, bond market demand, etc.
However, individual borrowers may see more personalized pricing depending on whether VantageScore 4.0 paints them in a better or worse light than FICO.
🏡 What happens to home prices?
Likely upward pressure—especially at the entry level.
If more buyers qualify:
Demand for starter homes could rise
Inventory in that price tier is already tight
Prices may be pushed up unless new housing supply keeps pace
As a note, many lenders aren’t currently prepared to handle the new models systemically. There is a scramble to get this implemented as soon as possible but will gradually roll-out over time.
Additionally, I wanted to do some research to see how my VantageScore 4.0 compared to my traditional FICO scores, but found it extremely difficult to get a view of my VantageScore 4.0 scores. It doesn’t appear to be super common in many of the credit monitoring, bank and credit card online portals.
Key Takeaway: VantageScore 4.0 is now approved for mortgages—unlocking credit access for millions of buyers, especially those overlooked by FICO. This shift could expand homeownership, especially for renters, first-timers, and credit "invisibles." While it won’t move rates broadly, it may personalize pricing and boost demand for entry-level homes.
🏡 Why First-Time Homebuyers Are Getting Older
The American dream of homeownership is getting harder to reach.
According to NAR data and The Guardian, just over 1.1 million people bought their first home in 2024—the lowest number since tracking began in 1989. The average first-time buyer is now 38 years old, up from the late 20s in the 1980s.
Why the shift?
Home prices hit a record $427,800 in May
Mortgage rates are still over 6.5%
Buyers now need to earn $126K/year to afford the average home—up from $79K in 2021 (Harvard Joint Center)
Renting is now far cheaper than buying, with entry-level ownership costing twice as much as renting for the first time since 2006.
Buying later often means delayed retirement and financial goals. According to Redfin’s Daryl Fairweather: “It probably means they’re going to be retiring later, because when you buy a home, you’re setting up for a 30-year-mortgage,” she said. “People are finding that they’re going to have to work longer basically to achieve these goals.”
With high rates and economic uncertainty, many buyers are still sitting on the sidelines—waiting for prices or rates to ease.
But here’s what’s often missing: education 📚
Many first-time buyers don’t realize there are federal and state programs that can lower interest rates or provide down payment assistance—programs designed to help buyers get in sooner, not later.
With so much uncertainty, the right information and guidance could make all the difference.
Key Takeaway: First-time homebuyers are older than ever—not because they want to wait, but because affordability, lack of inventory, and missing education are holding them back. With better guidance and awareness, more people could enter the market sooner—not later.
Jerome Powell vs. the World 🌍
I do not envy Jerome Powell. He’s carrying a lot of weight. His job is tough but it’s being made even tougher with the pressure from President Trump to drop rates and now Bill Pulte (head of the Federal Housing Finance Administration) calling for an immediate Congressional investigation and resignation.
“I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed ‘for cause,’” Pulte said recently.
Over the weekend, X was flush with reports that Jerome Powell is now considering resigning from his position before he is scheduled to be replaced in May of 2026.
For his mental health, that may be wise. But I strongly doubt he leaves his seat before his term is over.
Still… the idea that the Fed could be swayed by political pressure—from a president or someone like Bill Pulte—is a little unsettling. The Fed’s whole purpose is to stay independent, and messing with that balance could send shockwaves through the global economy.
Sure, a new Fed chair who immediately slashes interest rates sounds great on paper—but what’s the tradeoff? It’s not just about lower rates—it’s about keeping long-term stability intact.