US Mortgage Denial Rates Hit 18 Percent in 2025

The Federal Financial Institutions Examination Council reported that approximately 18 percent of mortgage applications in the United States were denied in 2025. Out of 5.2 million requests, 929,064 applicants were rejected. While this figure remains lower than the 30 percent denial rate recorded during the Great Recession, the likelihood of rejection varied sharply depending on the lender.

Credit unions maintained the lowest denial rate at just over 18 percent. In contrast, banks rejected roughly 32 percent of applicants, and independent mortgage brokers saw the highest denial rate at 49.6 percent. These figures were supported by Home Mortgage Disclosure Act data released by the Consumer Financial Protection Bureau.

Common reasons for loan rejections included low credit scores, insufficient income, inconsistent employment history, and high debt-to-income ratios. Wells Fargo noted that these factors often drive declines. Financial analysts observed a specific trend where high-income earners were rejected due to high consumer debt and lavish spending, while lower-income applicants with disciplined savings habits were more likely to qualify for loans.