All posts by Jonathan Reese

The mortgage industry stands at a turning point. As acquisition costs climb and regulatory changes reshape long-held practices like mortgage trigger leads, lenders must rethink how they identify and engage qualified borrowers. What’s emerging is a smarter, more strategic approach—one that begins long before a credit application is submitted and leverages alternative data to illuminate borrower readiness, income, and risk.  Traditional lead generation methods, often reliant on credit pulls and costly verification, are becoming less sustainable. Instead, forward-thinking lenders are embracing a layered data strategy—one that aligns each stage of the mortgage funnel with the right type of data at the right time.  Rental History as a Window into Readiness  A consumer’s rental history is far more than a record of where they’ve lived. It’s a powerful signal of their financial behavior, stability, and capacity to take on a mortgage. By analyzing verified rental payment data through sources like Experian RentBureau—the largest such database in North America—lenders can uncover early indicators of income, affordability, and risk.  For instance, rental payments are highly correlated with income, typically showing a 3:1 ratio. This allows lenders to estimate income at the top of the funnel without relying on more expensive, verified income and employment data. It’s a practical way to reduce cost while preserving accuracy in segmentation.  Alternative Data: From Insight to Action  In today’s mortgage market, it’s not just about what data you have—it’s about when and how you use it. A tiered approach to data usage allows lenders to optimize both performance and spend:  Prospecting and Segmentation: Observed data and rental history provide an affordable way to predict income and flag early risk signals without triggering compliance thresholds.  Prequalification: Lightweight verification products help validate consumer-reported income and employment for prequal decisions at a lower cost.  Decisioning: At the underwriting stage, verified income and employment data from trusted sources become critical to ensure compliance and close quality loans.  This progressive framework improves lead quality, reduces fallout, and allows marketing and lending teams to focus their efforts on high-potential borrowers.  Behavioral Indicators That Predict Mortgage Success  Certain data points consistently emerge as predictors of mortgage readiness:  Employment Tenure: Borrowers with more than six months in a verified job are twice as likely to apply for a mortgage.  Rental Payment Behavior: Renters with more than two late payments are four times more likely to become delinquent on their mortgage.  Affordability Thresholds: Consumers tend to feel comfortable with mortgage payments that are 25% to 75% higher than their rent—a range that correlates with lower delinquency and higher satisfaction.  These insights allow lenders to flag risk and readiness early—reducing reliance on one-size-fits-all targeting and creating more meaningful, data-driven engagement.  Preparing for a Post-Trigger Lead Environment  With the elimination of mortgage trigger leads looming, lenders will need to replace reactive lead generation tactics with proactive, insight-driven strategies. Alternative data provides the foundation for this shift. Rather than waiting for a credit inquiry to act, lenders can use rent data, employment patterns, and observed financial behaviors to predict who is most likely to engage—and succeed—on the path to homeownership.  Tools like Experian’s RentBureau and Observed Data platforms enable this transformation by providing access to decision-grade behavioral data earlier in the funnel. These tools not only reduce acquisition costs but also offer a better experience for the consumer—less invasive, more personalized, and more aligned with their financial journey.  Modernizing the Mortgage Funnel  The modern borrower expects a digital-first, seamless experience. For lenders, meeting this expectation requires more than a responsive website or fast application—it requires a reimagined data strategy.  The key is precision. Mortgage lenders that align the right data with the right decision point—from prequal to close—will outperform in efficiency, risk management, and consumer satisfaction. By layering alternative and verified data sources, they can build a funnel that is not only cost-effective but also calibrated to real indicators of borrower success.  Looking Ahead  The future of mortgage lending will be defined by agility, intelligence, and inclusivity. As the market moves away from legacy lead gen tactics and toward data-informed decisioning, the role of alternative data will only grow.  Lenders who adopt this shift early will be positioned to say yes to more borrowers, reduce costs, and deliver a better customer experience. Those who cling to traditional models risk falling behind as the industry evolves.  Now is the time to rethink the mortgage lead strategy. Not just to reduce cost—but to build a better, smarter path to homeownership for the next generation of buyers.  For a deeper dive into how alternative data is transforming mortgage lead generation, watch the recent HousingWire and Experian webinar: “Rethinking Mortgage Lead Strategy: How Alternative Data Sources Can Predict Income, Risk, and Readiness.” Learn how to apply these insights across your funnel—from prospecting to prequalification—and hear directly from Experian product leaders on practical strategies to boost efficiency and performance. Watch the full webinar on demand here.   

A Realignment is underway  The U.S. housing market is no longer waiting on the sidelines. After enduring over two years of historically high mortgage rates, the Federal Reserve began implementing rate cuts in fall 2025, with additional reductions forecast for early 2026. For lenders, this marks more than a turning point—it’s a call to action.  Whether you’re targeting first-time buyers, tracking refinance-ready loans, or watching affordability trends, today’s environment demands rapid, strategic adjustments.  Rate cuts are fueling renewed demand  Mortgage rates, which hovered around 7% for much of the past year, have begun to ease. Even a modest drop has the potential to unlock substantial borrower interest—particularly among the 4.4 million U.S. mortgages now “ripe” for refinance.  Expect a spike in both rate-and-term refinances and cash-out activity, as homeowners look to lower payments or access equity. Lenders must scale up quickly, especially around digital capacity, prescreen targeting, and streamlined closings.  Affordability is still a roadblock—Especially for younger renters  Despite improving borrowing conditions, affordability remains a systemic challenge. The national rent-to-income (RTI) ratio stands at 46.8%, up 7.7% since early 2023. In high-cost states like California and Massachusetts, it exceeds 56%.  Experian data reveals that 62% of renters fall into the low-to-moderate income category, spending over half their income on rent. Over 50% now fall into Near Prime or Subprime credit tiers, making alternative credit data—like rental payment history—vital for inclusive underwriting.  Refinance isn't the only opportunity—Target first-time buyers strategically  Gen Z is now the largest segment of the rental population, and many are financially strained yet aspirational. A major opportunity exists in helping these renters transition to homeownership using expanded credit models and customized offerings.  With Federal Housing Finance Agency (FHFA)-approved models like VantageScore 4.0 and FICO 10T on the horizon, lenders should explore how newer scoring frameworks and rent payment reporting can increase access to mortgage credit.  Region-specific strategies are more important than ever  From Miami to Minneapolis, market conditions vary drastically. Some metros, like Kansas City (+16.7%) and Louisville (+14.2%), are experiencing double-digit rent growth, while cities like Atlanta and Jacksonville are seeing declines.  Lenders must tailor outreach based on local affordability trends, migration patterns, and housing supply constraints. Dynamic analytics tools—like Experian’s Ascend or Mortgage Insights Dashboard—can guide regional strategy at scale.  The supply side may not keep pace  Even with rate cuts stimulating demand, housing supply could remain a bottleneck. Multifamily completions are outpacing starts 1.5 to 1, and single-family construction, though recovering, remains cautious.  In markets with tight supply, reduced borrowing costs may drive up prices faster than inventory can absorb, exacerbating affordability for first-time buyers.  What lenders should prioritize now: Build Refinance Infrastructure: Prepare for increased volume with instant income verification tools like Experian Verify to streamline processes. Target First-Time Buyers: Use rental history, cashflow scores, and rent-to-income metrics to assess nontraditional credit applicants fairly. Get Granular with Geography: Align product offerings with local affordability, vacancy rates, and rent growth. Leverage Self-Service Prescreen Tools: Act on opportunities quickly using Experian’s agile targeting platforms. Model with New Credit Scores: Take advantage of the Experian Score Choice Bundle to test VantageScore 4.0 and FICO 2 side by side. Final Thought: The market is not rebounding—It is realigning  The current housing shift is not a return to old norms—it’s the start of a redefined landscape. Lenders who act decisively, invest in technology, and prioritize inclusivity will lead the next chapter in mortgage growth.  Experian is here to support you—with data, insights, and tools designed for this very moment.   

The Quiet But Real Shift in Mortgage Marketing  Despite the media’s focus on digital advertising, the mailbox is quietly becoming a major battleground again for mortgage and home equity lenders. The environment is ripe for this: interest rates are stabilizing near 7 % (which opens up refinance & home equity demand), and consumer credit profiles remain robust yet tightening in certain segments. For lenders, precision outreach is now a key differentiator.  Why Direct Mail Still Works — and Why It Matters Now  According to a 2025 industry study, direct‑mail marketing continues to deliver the strongest ROI: for example, direct mail’s ROI is cited at ~$58 for every dollar spent, compared with ~$19 for PPC and ~$7 for email. PostGrid  A separate piece notes that physical mail pieces still command attention: “Consumers are more likely to trust physical mail than digital ads … response rates can range from 2% to over 5% depending on targeting and message quality.” KYC Data+2Highnote+2  But the most important reason mail is working now: data + personalization. Lenders who combine accurate consumer/credit/property insight with mail campaigns are seeing better alignment of offers and borrowers. A recent article emphasizes that “when backed by high‑quality data sources and AI‑driven triggers, mortgage direct mail can outperform digital‑only campaigns.” Megaleads  For mortgage & home‑equity marketers specifically, Experian’s data shows direct mail and refined segmentation remain growth levers in a market where originations are modest, but competition for good borrowers is intense. Experian+1  Why this matters now, for lenders:  With rates comparatively high, many borrowers are choosing to postpone purchases or full refinances—but still open to tapping equity. That makes mail‑based offers (especially those tailored with relevant property/equity/credit data) very timely.  Digital advertising is crowded, algorithmic, and increasingly expensive — mail provides a differentiated channel.  The exit or pull‑back of certain large players in home equity creates opportunity gaps.   The Data Speaks: From ITA to Prescreen — and What’s Changing  Here’s a breakdown of key shifts:  In May 2025, for mortgage and home‑equity offers:  Mortgage ITA (Invitation to Apply) volume: ~29.2 million  Home Equity ITA volume: ~25.8 million  Mortgage Prescreen volume: ~15.6 million  Home Equity Prescreen volume: ~19.0 million Experian  Further, recent trends report that home equity direct mail offers have now surpassed first‑mortgage offers in some segments — driven by aggressive marketing and AVM‑based personalization. Experian  The latest data from the ICE Mortgage Technology November 2025 Mortgage Monitor shows that falling mortgage rates have expanded the pool of homeowners who can reduce monthly payments via refinance or access home equity, which in turn supports more targeted direct‑mail outreach. Mortgage Tech  What this means for campaign strategy:  Prescreen (where the lender sends offers to pre‑qualified or high‑propensity segments) is edging into prominence over broad ITA campaigns — because it enables targeted, efficient spend and stronger conversion.  Lenders can use property and credit data (e.g., equity levels, credit score, loan‑to‑value, tenure) to craft mail offers that align with actual borrower situations (not just “Dear Homeowner”).  The gap left by large players exiting or backing off in home equity means agile lenders can expand mail volume and capture incremental market share.   Market Movers: Who’s Winning — and Why  In the direct mail and home-equity space, a mix of established players and newer entrants is reshaping the competitive landscape. Overall mortgage mail volume is being driven by institutions that lean heavily on prescreen strategies and sophisticated, data-driven segmentation. At the same time, leadership in ITA mail offers is shifting away from traditional incumbents toward organizations using more agile marketing approaches and refined offer logic.  Notably, several non-traditional and alternative-model providers now rank among the top mailers in the home-equity category, signaling growing consumer interest in options such as shared equity or sale-leaseback structures. Fintech and digitally native lenders, in particular, are accelerating home-equity prescreen activity; their speed, experimentation, and product innovation are raising expectations for both relevance and simplicity in borrower outreach.  Meanwhile, pullbacks and exits by some large financial institutions have opened meaningful white space in the home-equity market, creating opportunities for others to capture unmet demand.  For lenders looking to compete, the playbook is becoming clearer: rapid testing and iteration, tight coordination between direct mail and digital follow-up, a strong focus on homeowner equity, and precise, data-driven targeting. The most effective campaigns align product design to well-defined segments – for example, borrowers with substantial equity, strong credit profiles, and established tenure – ensuring offers are both timely and highly relevant.  Prescreen vs. ITA: Why Targeting Wins  The shift from broad ITA to prescreen‑based campaigns might seem nuanced, but its implications are strategic:  Prescreen advantages:  Better alignment with borrower creditworthiness and property profile — because you are sending offers to those who meet risk and propensity criteria.  Improved conversion and campaign efficiency — by reducing wasted mailings to low‑probability recipients.  Lower marketing spend per funded loan — because you spend less to reach the right audience.  Faster speed‑to‑market — thanks to platforms that allow weekly refreshed data and custom lists. For example, Experian’s self‑service prescreen platform offers weekly data updates and FCRA‑compliant targeting.  Regulatory and operational clarity — prescreen infrastructure has matured, with aligned credit data, reason‑codes, and compliance built in.  ITA (Invitation to Apply) still has use cases:  When you want to cast a wider net (e.g., first‑time homebuyers, large volume builds)  When brand awareness is a goal rather than immediate action  When the product is straightforward and broader, not highly segmented  But the winning strategy in 2025 and beyond is data‑driven prescreen + targeted direct mail, especially in home equity. As one blog post notes, direct mail campaigns that are personalized can deliver up to ~44% stronger conversions compared with less personalized campaigns. Megaleads  Strategic Opportunities for Lenders & Marketing Teams  Based on the data and competitive shifts, here are actionable recommendations:  Expand Home Equity Prescreen Offers: With home equity direct mail offers now pushing ahead of first‑mortgage offers in volume (and with tappable equity reaching trillions), this channel is ripe. For instance, a recent BCG report estimates ~$18.3 trillion in tappable equity in the U.S. system. BCG Media Publications+1  Leverage the Player Exits: Large institutions reducing or exiting HELOC/home‑equity lines provide space for nimble lenders to increase direct‑mail volume and connect with households previously under‑targeted.  Integrate Multi‑Channel Touchpoints: While mail is the vehicle, the journey often involves digital follow‑up, landing pages, and timely calls. Studies show layering direct mail with digital channels improves results. Highnote+1  Use Data for Targeting, Not Just Volume: Utilize property, credit, income, and behavioral data (from providers like Experian) to identify segments like: homeowners with >30% equity, 5–10 years of tenure, credit score 700+, and interest in renovations or cash‑out use cases.  Speed Matters: Campaigns should be nimble. Weekly data refreshes, agile list creation, rapid mail deployment, and timely follow‑up matter in a competitive environment.  Measure & Optimize: Track response, conversion, ROI per piece. For example, what are funded loans per 1,000 mail pieces? Which segments convert better? Optimize creative, offer, timing.  Stay Compliant & Transparent: Prescreen offers must follow FCRA rules; mail pieces must clearly disclose terms. Consumers and regulators are increasingly sensitive to over‑targeting or over-personalization — balance personalization with respect and transparency.* Megaleads  Putting It All Together: Rethinking Your Direct‑Mail Strategy  If your marketing playbook still treats direct mail as a “safe‑bet, high‑volume fallback”, it’s time for an upgrade. Today’s borrowers expect relevance, personalization, and fast follow‑through. They are homeowners — not just buyers — and many are seeking home‑equity options rather than traditional purchase refis.  Lenders that find success in this space are likely to:  Use data and analytics (credit + property + behavior) to identify the right audience.  Deploy prescreen‑based campaigns rather than generic blanket offers.  Combine direct mail + digital + phone as an orchestrated funnel.  Monitor performance in near real‑time and iterate quickly.  Offer products aligned with what the borrower wants (e.g., interest‑only draw period HELOCs, fixed‑conversion options, etc).  Operate with speed, precision, and compliance.  As the market shifts, the channel is shifting too. Direct mail isn’t dead — it’s evolving, and those who invest in the right mix of data, targeting, creative, and execution stand to win.   Call to Action  Ready to elevate your direct‑mail and prescreen strategy? Contact Experian’s Mortgage & Housing solutions team to explore how our platform enables:  Weekly refreshed, bureau‑grade credit + property data  Self‑service prescreen campaign build and list generation  Custom segmentation using credit, equity, tenure, and product propensity  Compliance‑ready reason codes and targeting workflows* Visit: experian.com/mortgage or speak with your Experian account executive today.   Next in the Series  Blog Post 3 – “Beyond the HELOC: Why the Future of Home Equity Might Not Involve Loans at All”  *Clients are responsible for ensuring their own compliance with FCRA requirements. 

Rental affordability in the U.S. isn’t just about rising prices—it’s about where those increases are happening. Some cities and states are becoming increasingly unaffordable compared to others, and renters are feeling the financial pressure differently across the country.  Not all rent increases are equal  National rent prices have increased by about 16% in two years, but where you live plays a huge role in how much of your paycheck goes toward housing. In places like California and Massachusetts, the average renter now spends over 56% of their income on rent. That’s nearly double the “affordable” threshold of 30%.  But even traditionally affordable states are feeling the heat. Oklahoma, Kentucky, and Louisiana all saw rent hikes between 6% and 10%—with Oklahoma topping out at 9.7%. These increases are hitting renters in places that used to be considered “safe” from housing inflation.  Regional breakdown:  Here’s how the rent-to-income ratio compares across regions:  West: Rent-to-income ratio of 46.4%  Northeast: 48.1%  South: 43% (but fastest-growing burden)  Midwest: 37.7% (still below the national average, but climbing fast)  Florida, for example, saw its rent-to-income ratio jump by 12.1% since 2023. Arizona isn’t far behind, with an 11.7% increase. These changes are tied to migration patterns—many people moved to these states during the pandemic, and now demand is far outpacing supply.  City-level surprises  Some of the biggest rent increases are happening in cities you might not expect:  Miami, FL: Up 21.1% YOY  Kansas City, MO: Up 16.7%  Louisville, KY: Up 14.2%  Chicago, OH: Up 13%  On the flip side, a few cities have seen rent drops:  Jacksonville, FL: Down 3%  Atlanta, GA: Down 2.2%  Austin, TX: Essentially flat  These shifts show how local economic factors and population trends can quickly change a market’s affordability.  More renters are moving—and struggling to settle  Another sign of pressure: renters are on the move. The percentage of renters with more than one lease has jumped since 2023, especially among Gen X and older millennials. People are relocating more often—sometimes chasing affordability, sometimes being priced out.  At the same time, vacancy rates are rising—from 6.6% to 7.1% nationally. That may sound good for renters, but it’s often a sign of mismatch: more units are being built, but not always where people can afford them.  The bottom line  If you’re a landlord or investor, these geographic insights matter. Rent pressure isn’t universal—but knowing where it’s concentrated can help you adjust screening, pricing, and retention strategies. For renters, this means being more informed and prepared before moving or signing a lease.  In our final post, we’ll explore the macro trends shaping the future—like mortgage rates, construction slowdowns, fraud risks, and how better data is helping landlords and lenders keep up. 

The U.S. housing market is no longer waiting on the sidelines. After enduring over two years of historically high mortgage rates, the Federal Reserve began implementing rate cuts in fall 2025, with additional reductions forecast for early 2026. For lenders, this marks more than a turning point—it’s a call to action. Whether you’re targeting first-time buyers, tracking refinance-ready loans, or watching affordability trends, today’s environment demands rapid, strategic adjustments. Rate cuts are fueling renewed demand Mortgage rates, which hovered around 7% for much of the past year, have begun to ease. Even a modest drop has the potential to unlock substantial borrower interest—particularly among the 4.4 million U.S. mortgages now “ripe” for refinance. Expect a spike in both rate-and-term refinances and cash-out activity, as homeowners look to lower payments or access equity. Lenders must scale up quickly, especially around digital capacity, prescreen targeting, and streamlined closings. Affordability is still a roadblock—Especially for younger renters Despite improving borrowing conditions, affordability remains a systemic challenge. The national rent-to-income (RTI) ratio stands at 46.8%, up 7.7% since early 2023. In high-cost states like California and Massachusetts, it exceeds 56%. Experian data reveals that 62% of renters fall into the low-to-moderate income category, spending over half their income on rent. Over 50% now fall into Near Prime or Subprime credit tiers, making alternative credit data—like rental payment history—vital for inclusive underwriting. Refinance isn't the only opportunity—Target first-time buyers strategically Gen Z is now the largest segment of the rental population, and many are financially strained yet aspirational. A major opportunity exists in helping these renters transition to homeownership using expanded credit models and customized offerings. With Federal Housing Finance Agency (FHFA)-approved models like VantageScore 4.0 and FICO 10T on the horizon, lenders should explore how newer scoring frameworks and rent payment reporting can increase access to mortgage credit. Region-specific strategies are more important than ever From Miami to Minneapolis, market conditions vary drastically. Some metros, like Kansas City (+16.7%) and Louisville (+14.2%), are experiencing double-digit rent growth, while cities like Atlanta and Jacksonville are seeing declines. Lenders must tailor outreach based on local affordability trends, migration patterns, and housing supply constraints. Dynamic analytics tools—like Experian’s Ascend or Mortgage Insights Dashboard—can guide regional strategy at scale. The supply side may not keep pace Even with rate cuts stimulating demand, housing supply could remain a bottleneck. Multifamily completions are outpacing starts 1.5 to 1, and single-family construction, though recovering, remains cautious. In markets with tight supply, reduced borrowing costs may drive up prices faster than inventory can absorb, exacerbating affordability for first-time buyers. What lenders should prioritize now • Build Refinance Infrastructure: Prepare for increased volume with instant income verification tools like Experian Verify to streamline processes. • Target First-Time Buyers: Use rental history, cashflow scores, and rent-to-income metrics to assess nontraditional credit applicants fairly. • Get Granular with Geography: Align product offerings with local affordability, vacancy rates, and rent growth. • Leverage Self-Service Prescreen Tools: Act on opportunities quickly using Experian’s agile targeting platforms. • Model with New Credit Scores: Take advantage of the Experian Score Choice Bundle to test VantageScore 4.0 and FICO 2 side by side. Final Thought: The market is not rebounding—It is realigning The current housing shift is not a return to old norms—it’s the start of a redefined landscape. Lenders who act decisively, invest in technology, and prioritize inclusivity will lead the next chapter in mortgage growth. Experian is here to support you—with data, insights, and tools designed for this very moment.

As we move into the final stretch of 2025, the U.S. housing market is balancing sustained, but stagnant originations volumes with softening credit performance. For mortgage lenders and servicers, this presents both challenges and opportunities. Experian’s highlights a housing market that is not in crisis but showing signs of strain that require attention and strategic adaptation. Identified risk trends: Escrow pressures and student loan headwinds Meanwhile, the return of student loan repayments is having a ripple effect across mortgage performance — particularly among borrowers with sub-660 credit scores and those already behind on student loans. These borrowers are exhibiting significantly higher mortgage delinquency rates, revealing an urgent need to track cross-credit dependencies more closely. In the home equity space, the delinquency picture is mixed. HELOC delinquencies have flattened, while HELOANs are experiencing a divergence — early-stage delinquencies are falling, but late-stage delinquencies are rising. These trends indicate relative stability in home equity credit performance, but attention should be paid to segments of the market, like securitized home equity, for deterioration in credit performance. Refinance revival: A glimmer of growth Despite these risk signals, growth is returning in key areas. Refinance activity is rebounding, driven by dips in Treasury yields and renewed borrower interest in lowering monthly payments. Originations are increasing, and mortgage direct mail marketing has resumed after a period of stagnation. Both prescreen and invitation-to-apply (ITA) campaigns are on the rise, signaling a re-engagement with the borrower market. Home equity lending is also heating up, particularly in the prescreen space, with fintechs aggressively scaling their outreach. This resurgence in marketing creates an opening for lenders — but only those equipped to act quickly. Market fundamentals: Why housing supply still lags Beneath these lending and marketing shifts lies a broader macroeconomic narrative. GDP growth is slowing, unemployment is creeping upward and inflation remains stubbornly high. Mortgage rates hover between six and seven percent, contributing to one of the most prominent constraints in today’s market: the lock-in effect. Over 80% of U.S. homeowners hold mortgage rates significantly below current levels, discouraging movement and keeping housing inventory tight. Even as new listings improved earlier this year, seasonal adjustments and elevated rates have brought supply back down. Construction activity remains uneven. While there’s been some progress in completions, overall new starts remain weak. Large-scale developers remain cautious, further constraining supply and sustaining price pressure in many markets. Strategic imperatives for lenders Given this context, what should lenders prioritize? First, portfolio risk management must evolve to keep pace with borrower realities. Custom risk models, proactive account reviews and early-warning systems can help surface emerging risks, especially among vulnerable cohorts with multiple debts or high debt-to-income ratios. Second, marketing strategies must become more agile. Investing in scalable tools like Experian’s self-service prescreen and/or account review enables faster execution, real-time list building, and more efficient targeting. With refinance activity picking up, this agility is key to capturing demand before it fades. Third, lenders must lead with data. From credit performance to macroeconomic indicators, strategic decisions need to be grounded in real-time insights. Aligning marketing, servicing, and risk teams around shared, data-driven intelligence will separate the winners from the rest. Bottom line: A controlled descent, not a crash In summary, the November 2025 housing market presents a picture of controlled deceleration, not a free fall. Borrowers are under pressure, but the system remains stable. For lenders, the message is clear: act now to optimize your portfolio, accelerate outreach and prepare for cyclical demand shifts. With the right strategies, lenders can not only weather the current environment but position themselves for the next wave of opportunity. This article uses data from both Experian Credit Bureau and Mintel: Global Market Intelligence & Research Agency

After a borrower opens a mortgage, their financial profile doesn’t stay static. Credit scores, debt-to-income ratios (DTI), and annual incomes evolve—sometimes positively, sometimes negatively—depending on both the individual borrower’s specific behavior and situation, as well as broader economic conditions, including factors like unemployment and interest rates. When we factor in rising escrow costs for home insurance and property taxes, the picture becomes even more complex.   Unfortunately, traditional market data for both private label and agency MBS, as well as “servicing” datasets generally used to build analytics for whole loan strategies, contain virtually no information regarding a borrower’s current credit profile. The current pay status of the subject loan is sometimes provided.  However, credit score and DTI values (if provided at all) are as of the origination date only. No information is provided regarding the borrower’s home insurance or property tax premiums.  In other words, as a mortgage loan seasons and the borrower’s credit profile drifts as new debts are added or paid off, payments on auto loans, student loans, credit cards, even other mortgages on the subject property are made or missed, and home insurance policy costs double (or triple!) in some cases, MBS investors using traditional market data only are truly flying blind with respect to the borrowers’ current credit health. Fortunately, more complete alternatives to supplement traditional market data exist. In this article, we’ll analyze Experian’s Mortgage Loan Performance (MLP) data, a monthly-refreshed join across loan level performance, borrower credit profile and property data for all US mortgages since 2005, to explore borrowers’ credit profile drift since loan origination.  This dataset contains current credit scores, tradeline balances and performance, escrow account information, and modeled income for all borrowers.  Section 1: Credit Score Migration Since Origination — Who Improves and Who Slumps?  Using the MLP dataset, we examined current and at-origination borrower credit profiles for over 42 million mortgages originated from January 2020 through July 2025.  Segmenting the data by different mortgage products shows distinct score migration patterns since loan origination as illustrated in Figure 1:  Conventional Loans (FNMA/FHLMC):   Conventional borrowers have experienced strong positive gains in credit score since origination for the 2020–2022 vintages with average VantageScore 4.0 migration of +11 to +22 points  For the more recent 2023-2025 vintages, borrowers have experienced flat or negative drift of averaging -6 to +2 points  FHA Loans:   FHA borrowers have experienced mostly negative VantageScore 4.0 drift of -6 to -19 points, with the steepest decline to date in the 2022–2023 vintages   VA Loans:   We see a positive drift for early vintages, especially 2020 to 2022 vintages, but a slightly negative drift for more recent vintages of -1 to -4 points.  Non-Agency Loans:    Similar to conventional loans, we see a positive credit score drift for 2020–2022 vintages, turning negative for 2024–2025 with an average drift of -1.5 to -4 points  Figure 1:  Vantage 4.0 Migration Drift Since Origination[1] Key Insights: Over the past 6 years, Conventional borrowers have generally improved their credit profile post-origination, notwithstanding small dips to-date for the last couple vintages.  On the other extreme, 4 of the 6 last FHA vintages have experienced credit score deterioration to date.   Beyond the obvious increase in delinquency and default risk due to deteriorating credit scores, a borrower’s ability to refinance efficiently is also impacted by credit score deterioration. A loan’s propensity to default or voluntarily refinance is  influenced by the borrower’s current credit score, which is absent from traditional market data, though present in MLP.  In this way, current credit score is a critical field for both nonagency and agency MBS analyses. Section 2: DTI and Income   As illustrated in Figures 2 through 4, even as incomes rise, DTI often climbs faster, signaling potential borrower stress:  Example (FHLMC):  2020 Vintage: DTI +5.9 points, Income +$24K 2023 Vintage: DTI +23.5 points, Income +$28K Figure 2:  DTI and Income Drift Since Origination for all mortgages  Figure 3:  DTI and Income Drift Since Origination for Freddie Mac mortgages Figure 4:  DTI and Income Drift Since Origination for GNMA, VA mortgages  Insights: Across all loan types, on average, borrowers are earning more relative to when they opened the loan but also taking on additional obligations over time at an even faster rate, which inflates their debt-to-income ratio.  Particularly striking is the DTI drift for the 2023 GNMA VA vintage, rising over 30 points in two years!  In addition to elevated risk of delinquency and default, elevated DTI also reduces the borrower’s ability to refinance efficiently by affecting the borrower’s ability to qualify for competitive refinancing rate.  Investors relying solely on traditional market data have no vision into the borrower’s current DTI, thereby limiting their ability to model and manage both default and voluntary prepayment risk.   Section 3: Escrow Pressure—Taxes and Insurance Surge  As illustrated in Figure 5, MLP data reveals that from 2021 to 2024:   Taxes haves increased by an average of 28.8%  Home Insurance rates have increased by an average of 54.4%, becoming the fastest-growing home ownership expense within this period  Higher escrow payments squeeze borrower budgets, driving increased delinquency risk and decreased affordability. Traditional market data contains no information regarding borrowers’ tax or insurance premium burdens. Figure 5: Average escrow payment increases from 2021 to 2024 Conclusion  Score migration, evolving income and DTI, and escalating escrow & tax costs create a dynamic risk environment for borrowers. Borrowers’ constantly changing credit health drives both credit (likelihood of default) and voluntary prepayment (credit score and DTI influence both ability and incentive to refinance) risks. In this context, monitoring borrower credit and income post-origination is critical.  Traditional market data for both private label and agency MBS contains no information related to a borrower’s current credit score, DTI, income or tax & escrow burden. Experian’s Mortgage Loan Performance dataset contains all this information, at the loan level, for ~100% of the US mortgage market, enabling better segmentation, predictive modeling, and risk management for both credit and prepayment risk.  Read our previous blog about Residential Mortgage Prepayments [1] All statistics are derived from Experian's Mortgage Loan Performance (MLP) Dataset