While national mortgage approval rates tell one story, the reality is your chances hinge on a surprising mix of personal details from your credit score to your zip code, as 2023 data reveals approval rates ranging from a dismal 64.7% for manufactured homes to a soaring 94.2% for veterans using VA loans.
Key Takeaways
- In 2022, the overall mortgage approval rate in the United States was 78.4%, down from 82.1% in 2021 according to HMDA data
- Among conventional loans, approval rates reached 84.2% for applicants with incomes over $100,000 in Q4 2023, per MBA survey
- FHA loan approval rate for first-time buyers was 91.5% in 2023, higher than VA loans at 89.7%, from HUD reports
- Credit score below 620 led to 91.2% denial rate in 2023, highest reason per Experian
- Debt-to-income ratio over 43% accounted for 28.4% of denials in 2022, CFPB HMDA analysis
- Insufficient credit history caused 12.7% of mortgage denials in Q4 2023, Ellie Mae report
- FICO scores 300-579 had 94.5% denial rate in 2023 Q1-Q3, Ellie Mae
- Average FICO for approved conventional loans was 754 in 2023, up from 748 in 2022, per MBA
- Borrowers with FICO 740+ saw 93.2% approval rates, vs 54.1% for 620-639 in 2022 HMDA
- DTI ratios averaging 38.2% for approved loans in 2023, up from 36.1% 2021, MBA
- Backend DTI >50% denied 67.3% conventional apps 2022, CFPB
- Median income for approved borrowers $112,500 in 2023, vs $85,400 denied, HMDA data
- Mortgage approvals in California averaged 72.1% in 2023 due to high costs, CalHFA data
- Texas saw 85.6% approval rates for conventional loans 2022, highest state, HMDA FFIEC
- New York metro denials 24.3% from appraisal issues 2023, NY Fed report
Mortgage approval rates are overall high but vary significantly by income, location, and credit profile.
Approval Rates
- In 2022, the overall mortgage approval rate in the United States was 78.4%, down from 82.1% in 2021 according to HMDA data
- Among conventional loans, approval rates reached 84.2% for applicants with incomes over $100,000 in Q4 2023, per MBA survey
- FHA loan approval rate for first-time buyers was 91.5% in 2023, higher than VA loans at 89.7%, from HUD reports
- In 2021, Black applicants had a mortgage denial rate of 18.2%, compared to 9.1% for white applicants, per CFPB analysis of HMDA
- Approval rate for self-employed borrowers dropped to 72.3% in 2022 from 76.8% in 2020, according to Ellie Mae Origence data
- Jumbo loan approvals stood at 81.4% for high-income earners in coastal markets during 2023, per Freddie Mac insights
- Millennial approval rates for mortgages averaged 75.6% in 2022, lagging behind Gen X at 83.2%, from TransUnion report
- Rural area mortgage approvals were 79.8% in 2022, versus 77.2% in urban areas, based on FFIEC HMDA data
- Refinance mortgage approvals hit 92.1% peak in early 2021 but fell to 68.4% by late 2023, MBA data
- Approval rates for DTI ratios under 36% were 89.7% in 2023, per CoreLogic analysis
- Asian American applicants saw 85.3% approval rates for purchase loans in 2022, highest among ethnic groups, HMDA via Urban Institute
- Low-income applicants (<50k) had 62.4% approval rates in 2022, up from 58.9% in 2020, CFPB HMDA
- VA loan approvals for veterans averaged 94.2% in FY2023, per VA annual report
- Approval rate for co-borrower applications was 88.5% in 2023, 12% higher than solo applicants, per LendingTree study
- In Q1 2024, approval rates for adjustable-rate mortgages (ARMs) were 76.8%, below fixed at 82.3%, Black Knight data
- Female-headed households had 74.9% approval rates in 2022, versus 81.2% for male-headed, per FICO HMDA analysis
- Approval rates in high-cost areas like California were 73.5% in 2023, per California Housing Finance Agency
- First-time buyer approvals rose to 81.7% in 2023 from 77.4% in 2021, NAR data
- Approval for eco-friendly home loans (green mortgages) reached 87.6% in 2023, per Fannie Mae
- Hispanic applicants' approval rate was 76.8% in 2022, improving 4.2% YoY, CFPB report
- Approval rates for 30-year fixed loans were 83.1% in 2023, highest product type, MBA
- Gig economy workers saw 69.4% approvals in 2022, per Upstart data
- Senior (65+) applicant approvals were 71.2% in 2023, lowest age group, AARP study
- Approval for manufactured home loans was 64.7% in 2022, per FHFA
- Joint income applications over $200k had 91.8% approvals in 2023, Equifax
- Approval rates post-COVID peaked at 88.4% in mid-2021, NerdWallet analysis
- Native American applicants had 73.9% approval rates in 2022, HMDA data
- Bridge loan approvals were 67.2% in high-rate environment 2023, Bankrate
- Approval for non-QM loans averaged 74.5% in 2023, per Non-QM report
Approval Rates Interpretation
The mortgage approval landscape reveals a system where, depending on who you are and what you seek, your chances range from "virtually guaranteed" to "good luck," painting a picture of a market that is both remarkably efficient for the well-heeled and yet still stubbornly, and often inequitably, a gauntlet for everyone else.
Credit Score Impacts
- FICO scores 300-579 had 94.5% denial rate in 2023 Q1-Q3, Ellie Mae
- Average FICO for approved conventional loans was 754 in 2023, up from 748 in 2022, per MBA
- Borrowers with FICO 740+ saw 93.2% approval rates, vs 54.1% for 620-639 in 2022 HMDA
- FHA approvals required minimum 580 FICO, with 82.6% success rate above 660 in 2023, HUD
- Credit score improvement of 20+ points boosted approvals by 15.7% mid-2023, TransUnion study
- VantageScore 3.0 average for denied apps was 672 vs 762 approved 2022, VantageScore report
- UltraFICO (alternative data) helped 12.4% more sub-620 approvals in pilot 2023, FICO
- Scores 660-699 had 78.9% approval for purchase loans 2023, CoreLogic
- Post-bankruptcy FICO recovery to 680+ yielded 71.3% approvals after 4 years, Equifax 2022 data
- Gen Z applicants averaged FICO 712, with 84.5% approvals over 700 in 2023, Experian
- Decline in average approved FICO to 750 in Q4 2023 due to rates, Black Knight
- FICO 8 model showed 5.2% higher approvals than FICO 5 for mortgages 2022, myFICO
- Borrowers with scores 640-659 denied at 41.8% rate 2023, Freddie Mac
- Using VantageScore 4.0 increased approvals 8.9% for thin files 2023, VantageScore
- Average FICO for jumbo approvals was 782 in 2023, MBA jumbo survey
- Credit inquiries >3 in 12 months dropped FICO impact by 27 points, avg denial up 22%, LendingTree 2022
- Seniors 65+ averaged FICO 784 for approvals, highest demo 2023, AARP/CoreLogic
- Subprime recovery: FICO 600-619 approvals rose 3.4% YoY to 45.2% 2023, NerdWallet
- Trended credit data boosted FICO-equivalent scores 15 points for 11% more approvals 2022, Fannie Mae
- Average denied FICO was 683 in urban vs 691 rural 2023, Urban Institute HMDA
- FICO >800 approvals at 97.6%, but only 8% of apps 2023, Bankrate stats
Credit Score Impacts Interpretation
The mortgage landscape in 2023 was a brutal meritocracy where your credit score was less a number and more a sacred totem, as the difference between a 95% denial rate for the financially wounded and a 93% approval rate for the credit-pious shows that lenders worship at the altar of FICO with a fervor usually reserved for minor deities.
Denial Reasons
- Credit score below 620 led to 91.2% denial rate in 2023, highest reason per Experian
- Debt-to-income ratio over 43% accounted for 28.4% of denials in 2022, CFPB HMDA analysis
- Insufficient credit history caused 12.7% of mortgage denials in Q4 2023, Ellie Mae report
- Employment verification issues led to 8.9% denials for self-employed in 2022, MBA data
- Property appraisal shortfalls denied 15.3% of applications in 2023, CoreLogic
- Excessive debt obligations were cited in 31.6% of denials for FHA loans 2022, HUD
- Low residual income rejected 9.2% of VA loan apps in FY2023, VA report
- Unverifiable income denied 14.8% of gig worker applications in 2023, LendingTree
- Credit score drops mid-process caused 7.1% pullouts/denials 2022, TransUnion
- Location in flood zones without insurance denied 4.5% rural apps 2023, FDIC
- LTV ratio over 97% rejected 22.7% FHA first-time buyers 2022, FHFA
- Bankruptcy within 2 years denied 96.8% conventional loans 2023, FICO
- Foreclosure history led to 89.4% denial rate post-2020, Equifax study
- Insufficient down payment cited in 19.2% jumbo denials 2023, MBA
- Multiple recent inquiries tanked 11.3% approvals 2022, VantageScore
- Mismatched borrower-property income ratios denied 6.8% in 2023, Urban Institute
- No credit profile (thin file) denied 13.6% young applicants 2022, CFPB
- High student debt loads over $50k denied 25.4% millennial apps 2023, NerdWallet
- Appraisal gaps >10% caused 18.9% denials urban markets 2022, Black Knight
- Unseasoned funds for down payment rejected 5.7% 2023, Fannie Mae guidelines
- Overleveraged rental properties denied 16.2% investor apps 2022, CoreLogic
- Income not meeting 2-year history denied 21.1% contract workers 2023, Bankrate
- Property condition issues denied 9.8% fixer-upper loans 2022, FHA data
- Geographic restrictions (non-warrantable condo) denied 23.4% 2023, condo stats
Denial Reasons Interpretation
The path to mortgage approval is a minefield where your past financial missteps, present income instability, and future property's flaws all hold a veto vote against your dream home.
Income and Debt Factors
- DTI ratios averaging 38.2% for approved loans in 2023, up from 36.1% 2021, MBA
- Backend DTI >50% denied 67.3% conventional apps 2022, CFPB
- Median income for approved borrowers $112,500 in 2023, vs $85,400 denied, HMDA data
- Student debt avg $42k reduced approvals 14.2% for millennials 2023, TransUnion
- Front-end DTI <28% correlated with 91.4% approvals 2022, Ellie Mae
- Self-employed income variability led to avg DTI calc 42.7%, 19% denial hike 2023, LendingTree
- Income < $50k with DTI 40%+ denied 58.9% 2022, Urban Institute
- Alimony/child support factored into DTI reduced approvals 9.8% women-led 2023, CFPB
- Gig income avg $68k verified for 73.2% approvals under DTI 36% 2022, Upstart
- Debt payoff pre-app boosted DTI by 12 points avg, +22% approval odds 2023, Equifax
- High medical debt >$10k denied 16.4% apps despite good FICO 2022, Experian
- Dual-income households avg DTI 34.5%, 87.6% approval 2023, NAR
- Auto loan debt avg $28k impacted 11.3% denials young buyers 2022, CoreLogic
- Income verification via 1099s showed 25% higher DTI volatility, -15% approvals 2023, MBA
- Credit card utilization >30% with DTI 38% denied 29.7% 2022, FICO
- Residual income req for VA: avg $1,200/mo shortfall denied 8.2% 2023, VA
- Investor property debt loaded DTI to 45.2% avg, 62% approval drop 2022, FHFA
- Overtime/bonus income stability <2yrs denied 12.6% despite high gross 2023, Fannie Mae
- DTI caps at 50% for non-QM allowed 68.9% approvals high earners 2022, Non-QM News
- Low doc loans for DTI >45% had 59.3% approvals self-employed 2023, Bankrate
Income and Debt Factors Interpretation
In the unforgiving arithmetic of modern mortgage approval, it seems lenders have decided you may now stretch yourself a bit thinner—to a precise 38.2%—so long as your income is high, your debts are tidy, your job is stable, and you have no medical bills, student loans, car payments, side hustles, child support, investor ambitions, or unpredictable bonuses, with special penalties applied for being young, self-employed, or a woman.
Regional Differences
- Mortgage approvals in California averaged 72.1% in 2023 due to high costs, CalHFA data
- Texas saw 85.6% approval rates for conventional loans 2022, highest state, HMDA FFIEC
- New York metro denials 24.3% from appraisal issues 2023, NY Fed report
- Florida FHA approvals 89.4% boosted by investor activity 2022, HUD regional
- Midwest states like Ohio had 81.2% approvals, low cost advantage 2023, MBA regional
- Northeast urban approvals 74.8% dragged by high DTI 2022, Urban Institute
- Southeast (GA, NC) approvals 83.7% for first-time 2023, NAR metro stats
- Pacific NW (WA/OR) 79.5% approvals, eco-loan surge 2022, Freddie Mac
- Southwest deserts (AZ/NV) jumbo approvals 77.2% despite tourism volatility 2023, CoreLogic regional
- Rural Appalachia approvals 76.4% hampered by income 2022, FDIC rural
- Chicago MSA approvals 75.9%, property taxes key denial 2023, local HMDA
- Denver CO 82.1% approvals, tech influx 2022, Bellwether data
- Atlanta GA 86.3% highest South, migration boost 2023, Equifax metro
- Detroit MI low-income approvals 69.7%, revitalization aid 2022, CFPB case
- Hawaii island approvals 68.2% lowest state, cost barrier 2023, HI Housing Finance
- Boston MA 73.4% student debt heavy 2022, Fed Boston
- Phoenix AZ 84.5% sunbelt leader 2023, growth data
- Rural Dakotas 82.9% ag income stable 2022, Farm Credit
- LA MSA 71.6% condo restrictions 2023, Fannie regional
Regional Differences Interpretation
From coastal Californians facing the harsh math of their dreams to Texans cruising through conventional loans, these approval rates paint a clear, cost-dictated map of American aspiration, where your mortgage fate depends heavily on whether you're battling a high DTI in Boston or benefiting from an ag boom in the Dakotas.
Temporal Trends
- Approval rates surged 15.2% nationally post-COVID to 88% in Q2 2021, MBA historical
- 2023 approvals fell 12.4% YoY to 76.8% amid rate hikes, Black Knight annual
- Pre-2008 peak approvals 92.3% in 2006 crashed to 52.1% 2009, historical HMDA
- Q4 2022 approvals dipped to 73.5% lowest decade, Ellie Mae trends
- 2019-2020 approvals rose 4.7% to 84.2% low rates era, TransUnion yearly
- 2024 Q1 rebounded 2.1% to 78.9% rate pause hopes, CoreLogic monthly
- Decade avg approval 79.6% 2013-2023, steady post-crisis, FFIEC long-term
- Refi approvals 95.2% peak 2020-2021 then 55.4% 2023, Freddie Mac trends
- First-time buyer share of approvals 32.1% in 2023 down from 38.4% 2020, NAR profile
- Denial rates doubled to 21.6% from 2021-2023 high rates, CFPB trends
- FHA approvals trended up 5.3% 2020-2023 to 90.1%, HUD yearly
- Credit score req tightened 8 points avg 2022-2023 to 752, MBA survey trends
- DTI avg rose 2.8 points 2021-2023 to 39.4%, lender adaptation
- Minority approvals improved 3.2% 2018-2022 to 78.5%, long-term HMDA
- Jumbo approvals volatile: 85.4% 2021 to 79.2% 2023, historical MBA
- Rural approvals stable 78-82% 2015-2023, USDA trends
- ARM approvals spiked 300% YoY 2023 to 15% share, rate response
- Post-Great Recession recovery: approvals from 65% 2012 to 85% 2019, Fed data
Temporal Trends Interpretation
Mortgage approval rates behave like a weathervane spun by the whims of the economy: they soar with low rates and optimism, then plummet with rate hikes and fear, but persistently claw back toward a steadier, more cautious normal.
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