Mortgage Affordability Reaches 4-Year High Despite Fed Uncertainty

The US housing market is showing signs of a "thaw" as mortgage affordability hit its highest level since 2022. Lowering yields on the 10-year Treasury and a steadying of home prices in several major metros have provided a rare window of opportunity for first-time buyers who were previously sidelined by high borrowing costs.

The reprieve may be short-lived, however, as the market prepares for the shift to a Warsh-led Federal Reserve. Additionally, newly implemented tariffs are beginning to impact the cost of construction materials, leading some economists to warn that the recent gains in housing affordability could be eroded by a new wave of "supply-side inflation."