While still above the long-term average, this marks a notable improvement from the 35% peak in late 2023. Roughly a dozen of the largest 100 US markets, mainly in the Midwest, have returned to near-normal affordability, though coastal cities remain stretched. In Los Angeles, for instance, 62% of median income is needed for a typical mortgage payment, ICE data showed.
Meanwhile, the government shutdown is expected to allow mortgage rates to continue to fall. Effects from the shutdown, combined with worse-than-expected jobs numbers, will likely coerce the Federal Reserve to cut rates again at the end of the month.
“The momentum for mortgage rates to be lower is high,” Eric Hagen, managing director and mortgage and specialty finance analyst at BTIG, told Mortgage Professional America.
Eric Hagen of BTIG says falling rates and steady capital flow leave the housing market stable despite the shutdown. He notes lower volatility, strong non-bank originators, and resilience unless the disruption stretches beyond two weeks.https://t.co/Dr1Q64vCiv
— Mortgage Professional America Magazine (@MPAMagazineUS) October 2, 2025
Annual home price growth ticked up to 1.2% in September after months of slowing, as inventory remained 17–19% below pre-pandemic norms.
“The strongest firming occurred both among markets in the West that have seen inventory levels backtrack in recent months and parts of the Northeast where inventory levels remain in deep deficits,” the report said.