Mortgage rates decreased last week following the Trump administration’s tariff announcement. The sharp sell-off in the stock market prompted investors to flock to the bond market, which led to a drop in bond yields. Since mortgage rates tend to follow the yield on the 10-year U.S. Treasury, this decline resulted in lower mortgage rates.
This drop in rates comes at an important time for the housing market. However, several factors are still working against homebuyers and putting pressure on housing affordability. The best example of this is that the typical monthly payment for a U.S. homebuyer is consistently achieving record highs in 2025.
While there is an increasing supply of homes entering the market, it is not aligned with the most in-demand price points—particularly on the lower end. Additionally, the overall supply remains significantly lower than historical levels due to ongoing issues with significant underbuilding.