FICO Finally Gets a Challenger—What VantageScore Means for Buyers

Hello everyone! This week’s market update is packed with changes that could reshape the mortgage world—some exciting, some a little chaotic.

We’ve got breaking news on VantageScore 4.0 shaking up the credit scoring game, a deeper look into why first-time homebuyers are getting older (and what we can do about it), and a front-row seat to the mounting pressure on Jerome Powell.

Let's dive into the latest updates!

Read time: ~4 minutes

Rates ended UP compared to last week, and volatility was HIGH. Rates are in the high 6’s for most loan types without paying discount points. Paying discount points can get you in the mid 6’s.

FICO Finally Gets a Challenger—What VantageScore Means for Buyers

Fannie Mae and Freddie Mac just approved VantageScore 4.0—and it’s already shaking up the mortgage world. FICO stock dropped over 18% on the news, which tells you everything you need to know about how serious this is.

So why does it matter?

✅ More Inclusive Scoring = More Approvals
VantageScore 4.0 brings a fresh approach by:

• Using trended data (not just a snapshot)

• Counting rent, utilities, and telecom bills (if reported)

• Generating scores with just 1 month of credit history
  This could be a game changer for first-time buyers, renters, and borrowers with limited credit history.

💸 Will This Move Rates?
Overall mortgage rates? No—those are tied to the bigger economic picture. But individual pricing? That’s a maybe. If your VantageScore paints a better picture than FICO, you might see improved terms.

🏡 What’s the Impact on Prices?
If more people can qualify, especially in the entry-level price points, we’ll likely see demand rise. That puts pressure on already tight inventory and could push prices up—unless we see more supply.

📉 What’s Next?
It’s going to take time to roll this out across the board. Most lenders aren’t equipped to use it yet. I even tried looking up my own VantageScore 4.0 recently—nearly impossible to find. Most apps still focus on FICO, for now.

Delayed Dreams: The First-Time Buyer Crunch

Here’s a stat that might surprise you: the average first-time homebuyer is now 38 years old. That’s up nearly a decade from where it was just a generation ago.

According to NAR, only 1.1 million people bought their first home in 2024—the lowest total since they started tracking in 1989. And it’s not for lack of interest—it’s affordability, plain and simple.

Here’s what’s pushing people out:

• The median home price hit $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)

• Renting is cheaper than buying in most markets—for the first time since 2006

The consequence? Buyers delay, and with that delay comes long-term impact—like working longer just to retire later. A 30-year mortgage at 40 means homeownership runs right into retirement planning.

But here’s the bigger problem: most buyers don’t know their options.
There are state and federal programs available—offering reduced interest rates, down payment assistance, or even forgivable loans. These tools are designed exactly for the buyers sitting on the sidelines right now.

Is Jerome Powell About to Tap Out?

Not only is he managing the country’s inflation fight and rate policy—but now he’s getting heat from both President Trump and FHFA Director Bill Pulte. Last week, Pulte publicly called for Powell’s resignation and a Congressional investigation, accusing him of political bias and misleading testimony before the Senate.

Then over the weekend, X was full of rumors that Powell is considering stepping down before his term ends in May 2026. Personally, I doubt he leaves early—but the pressure is real, and it’s coming from all sides.

Here’s the issue: the Fed is supposed to be independent. If markets start believing that Fed policy is getting shaped by politics, we could see major ripple effects—especially in global markets that count on U.S. stability.

Yes, a new Fed Chair might cut rates faster… but that kind of sudden shift could cause just as many problems as it solves.

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