Rising consumer debt ratios, affordability challenges and uneven access to homeownership are weighing heavily on the housing market as 2025 nears its close, according to a new survey of loan officers released Thursday by real estate platform HomeLight.

In the survey, 80% of lenders reported an increase in consumer debt-to-income ratios over the past 12 months. Among this group, 38% categorized it as a significant increase while 42% called it a slight increase. Only 19% said they observed no changes in their markets.

“Affordability will continue to remain a challenge for most buyers due to higher rates and home prices,” said Bradley Hacker, a loan officer in Kentucky. “Consumer debt is at an all-time high and is hampering people’s ability to buy.”

Debt consolidation has emerged as the dominant driver of home equity borrowing and a key theme that loan officers reported — 81% of loan officers told HomeLight that they’ve seen a spike in homeowners borrowing against their equity, with 29% qualifying this as a significant increase and 52% calling it a slight increase.

In 2025, 87% of loan officers told HomeLight that debt consolidation was the main reason borrowers accessed their equity through home equity lines of credit (HELOCs). The figure was a nearly identical 88% in 2024.

At the same time, many borrowers are waiting for mortgage rates to fall further before making a move. More than one-third of lenders said buyers remain fixated on the possibility of rates dropping to 5.75%, despite current averages hovering in the mid-6% range.

Lenders, however, are cautioning against playing the waiting game.

“Waiting and timing rates is a fool’s gamble. Buy the home before it gets even more expensive. The opportunity to get a lower payment will come with the next rate cycle. Home price declines are statistically very uncommon,” loan officer Jeff Abel said.

The affordability gap is also widening across professions. Lenders reported that health care and tech workers were most likely to succeed in completing purchases, while those in retail, transportation and hospitality continue to be priced out.

First-time buyers earning less than $75,000 faced especially steep odds, with 70% unable to close deals.

“The primary concern for the majority of potential buyers is affordability. Even though rents are high, renters have nice homes with amenities in great locations. They find it unjustifiable to increase their housing payment by 50% or more to buy a home that needs work and that is far from their current life activities,” said April Blackwell, a North Carolina loan officer.

Feedback on Fannie-Freddie IPO

Policy uncertainty is also weighing on the market. The Trump administration is preparing to sell stock in Fannie Mae and Freddie Mac, which have been under federal control since the 2008 financial crisis.

The rumored initial public offering (IPO) was first reported by The Wall Street Journal on Aug. 8. Just a day later, Trump seemed to confirm the report and posted an AI image on Truth Social of him at the New York Stock Exchange with the words: “MAGA LISTED NYSE” and “The Great American Mortgage Corporation,” along with a date of November 2025.

The idea of a merger has garnered mixed industry feedback. U.S. Department of Commerce Secretary Howard Lutnick appeared on CNBC last week and disclosed that the IPO “could well be this year … sooner than people think.”

“I am concerned that turning Fannie Mae and Freddie Mac public could increase the costs to the buyer. Private enterprise will want to maximize earnings, which could impact interest rates,” veteran loan officer Dave Henry said in the HomeLight survey.

Other responses were more blunt.

“Look at the last time they were private; it didn’t benefit the average homeowner. It benefited shareholders until the system collapsed, and then, taxpayers had to bail them out,” said Arizona loan officer Daisy Garza Jardine.

The survey was fielded from Aug. 19-26 via an online poll of LOs from 80 top lending companies across the U.S., including American Pacific Mortgage, Fairway Home Mortgage and The Loan Store.

The full survey includes the names of loan officers who participated and voluntarily offered to share their names to be included in the report.

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