A key measure of US housing affordability worsened for the first time in almost three years, as higher borrowing costs soaked up a bigger chunk of earnings for new homebuyers.

The decline marks a reversal from the gradual improvement seen since 2023, when affordability had been slowly recovering amid shifting market conditions.

Rising mortgage rates and elevated home prices have combined to erode purchasing power, particularly for first-time buyers who already face tight inventory and competition.

Economists say the trend could persist unless income growth accelerates or borrowing costs ease. The data underscores ongoing challenges in the housing market despite recent policy adjustments.