The decrease in hanging home sales can mean a slow spring market
The profit of the month-over-month is encouraging, but the annual decrease suggests that 2025 could be even worse than 2024, when the sale fluctuated for almost 30 years of lows. While the delay in the sale is caused by the usual perpetrators, another care still needs to be ingrained – uncertainty with regard to the economic policy of President Donald Trump.
“On the way to spring, a modest seasonal increase in the activity of buying houses is expected,” First American Senior economist Sam Williamson said in a statement. “Challenges such as affordable restrictions and the ongoing tariff locking effect continue to weigh heavily compared to the dynamics of pre-Pandemic spring markets.”
In anticipation of housing sales, a leading indicator for the sale of existing home, and it takes a month or two before they are displayed in anticipation of the latest dataset. But the report of Nar confirms the conclusion from data by other leading indicators.
According to the Mortgage banking association (MBA), Loan requests for purchases in new home declined in February by 6.9% year after year. Just like in anticipation of sale, they came from January, but only with 0.3%. The new construction report of February of the US Census Bureau showed an annual decrease of 6.8% in building permits and a decrease of 2.9% in the start of the home.
The good news for home buyers and real estate professionals is that the inventory has risen rapidly throughout the country, whereby the report of Nar shows a substantial 27.5% increase compared to last year. That follows with Altos Data, which shows an enormous stock gain on an annual basis in every state in the country, resulting in price decreases in five states.
The prospects for the rest of spring are cloudy because of the current and escalating trade war. Trump has implemented a rate of 25% on all samples and aluminum products, and on 2 April a number of new rates have been set to step, including potential levies on every country in the world and extra rates for Mexico and Canada. Lumber is also threatened with rates.
These rates are a blow for house builders. If Trump allows them to come into force, this will damage the market for new houses. But they can also hinder the question if they ensure that inflation rises – a conclusion of many economists.
“The prospects for slow market activity are not necessarily a foregone conclusion”, ” Clear MLS Chief Economist Lisa Sturtevant said in a statement. “The mortgage interest rate has fallen and can come down quickly if the economy slows down.
“For some potential buyers, the combination of lower rates and more inventory can be more important than economic uncertainty. It will take some time to see how the push and appetite in the market will play this spring.”
