top of page

Affordability Improves as Rates Ease, but Market Remains Mixed

  • Mortgage Returns
  • 5 days ago
  • 1 min read

Lower rates boost affordability, but regional trends diverge.


Home Affordability Is Easing Buying a home now takes 31.1% of a buyer’s median income, down from a recent peak of 35.2% in October 2023. The median monthly payment for new buyers decreased $45 from June to July. Purchase applications are up 23% from last year*, buoyed by lower mortgage rates. *week ending Sept. 5 Regional Housing Markets Paint Different Pictures South & West: Rising inventory and soft demand are slowing sales. Midwest & Northeast: With tight supply and strong demand, homes are selling 1–2 weeks faster than pre-pandemic norms. Mortgage Rates Tumble Following Weak Jobs Report • Mortgage rates dropped 16 bps on Sept 5 — the biggest single-day decline in nearly a year • Only 22,000 jobs added in August, Far below the 75,000 forecast • June numbers revised downward from +14,000 to -13,000, the first negative reading since 2020 Slowing Labor Market Fuels Rate Cut Expectations • Markets expect a 25 bps* Fed rate cut on Sept 17, but mortgage rates have likely already priced this in. *Forecast as of Sept. 5

Sources:

  1. ICE Mortgage Monitor, September 2025.
  2. Mortgage Bankers Association (MBA), Purchase Applications Payment Index, July 2025.
  3. MBA, Weekly Mortgage Applications Survey, week ending September 5, 2025.
  4. Mortgage News Daily, MBA, September 5, 2025.
  5. Realtor.com, “Cruel Summer: Why the U.S. Housing Market Is Stuck,” August 26, 2025.
  6. Mortgage News Daily, “Mortgage Rates Plummet Back to Fall 2024 Levels,” September 5, 2025.
  7. U.S. Bureau of Labor Statistics, Employment Situation Summary, August 2025.
  8. MarketWatch, U.S. Economic Calendar. Forecasts derived from surveys of economists conducted by Dow Jones Newswires and The Wall Street Journal.
  9. CME FedWatch, September 5, 2025.

Comments

Commenting on this post isn't available anymore. Contact the site owner for more info.

Powered by ICE Mortgage Technology

 

© 2025 Market Perspective Newsletter. All Rights Reserved. 

bottom of page