Joel Berner of Realtor.com reports that mortgage rates have dropped, with the Freddie Mac 30-year rate falling 13 basis points to 6.63%, the lowest since December. This decline, driven by a dip in the 10-year Treasury yield, could boost the spring housing market, though inflation concerns and potential tariffs may keep rates elevated. Improved financing conditions, rising inventory, and lower home prices provide momentum for buyers, particularly first-time homebuyers who were largely sidelined in 2024.
Source: Realtor.com (March 2025)
Kara Ng of Zillow reports that February’s decline in mortgage rates, driven by economic uncertainty, presents a potential opportunity for home buyers. Consumer confidence has seen its sharpest drop over three years while manufacturing data indicates rising prices but weaker demand and employment. The Atlanta Fed’s GDP Nowcast predicts a first-quarter contraction, adding to market concerns. A cooling labor market and inflation pressures leave the Fed in a challenging position
Diana Olick of CNBC reports that a sharp drop in mortgage rates has driven a 20.4% surge in total mortgage applications, marking the first increase in three weeks and the largest weekly jump since November 2024. The average 30-year fixed mortgage rate fell to 6.73%, its lowest level since December, as economic uncertainty and new tariffs dampened consumer sentiment. Refinancing applications skyrocketed 37% for the week and were up 83% year-over-year, while purchase applications rose 9% but remain historically low.
Dana Anderson of Redfin reports that despite lower mortgage rates, pending home sales are down 6.4% year-over-year as rising home prices and economic uncertainty continue to weigh on buyers. However, Southern California is seeing an increase in pending sales, with Los Angeles leading at 8.5% growth. While falling rates attract more buyers, affordability challenges and concerns over insurance in fire-prone areas remain key factors in the housing market.
Investors and markets
Dana Anderson and Sheharyar Bokhari of Redfin report that investor home purchases have declined nationwide due to high mortgage rates, economic uncertainty, and weakening housing demand. Investors bought 17% of homes sold in Q4 2024, down from 19% a year earlier, with overall purchases falling 3.9% year-over-year to their lowest fourth-quarter level since 2016. Florida has seen the sharpest pullback, with investor purchases down 28% in Orlando and 21% in Miami. Elevated interest rates and slowing rent growth have made real estate less lucrative, pushing some investors toward more stable assets like bonds.
Source: Redfin (March 2025)
“Investors purchased 8,220 condos in the fourth quarter, the lowest level for that time of year since 2012. That’s down 13% from a year earlier, a much bigger decline than any other property type. Investors are buying fewer condos because the condo market has been slowing, particularly in Florida, due partly to the surge in HOA fees caused by worsening natural disasters. In Orlando, investor purchases of condos fell nearly 30% year over year in the fourth quarter. They fell 26.1% year over year in Tampa, and 22.9% in Miami.”
Diana Olick of CNBC reports that rental competition is intensifying despite record-high apartment construction in 2024 due to high lease renewal rates and strong occupancy. Nearly 600,000 multifamily units were completed last year—the most since 1974—yet rental demand remains high, with occupancy at 93.3% and lease renewal rates rising to 63.1%. Miami is the most competitive market, with an average of 14 applicants per unit, driven by job growth and tax incentives. The Midwest also ranks highly, with suburban Chicago, Detroit, and Cincinnati among the top markets.
ATTOM Data Solutions reports on markets at risk, highlighting that California, Illinois, New York City, and parts of Florida have the most vulnerable housing markets, driven by affordability gaps, rising foreclosures, and economic pressures. Two-thirds of the 50 most at-risk counties are concentrated in these areas, with Chicago, New York, and inland California seeing significant exposure. In contrast, markets in Wisconsin, Virginia, Tennessee, and Pennsylvania—particularly in Washington, D.C., Nashville, and Richmond—are among the least vulnerable.
Veronica Grecu of RentCafe reports that the Midwest has emerged as the most competitive rental region in early 2025, with Suburban Chicago ranking second nationwide and closely challenging Miami, the top market. Despite Florida’s cooling rental market, Miami remains the most in-demand, while Chicago’s broader metro area secures a strong foothold, with the city ranking 18th. Nationally, rental competitiveness remains high, with a RentCafe Index score of 75.7, as more renters choose to stay put.
Source: RentCafe (March 2025)
Hannah Jones of Realtor.com reports that Hartford-West Hartford-East Hartford, Conn., ranked as the nation’s hottest housing market in February, marking its fourth time in the top spot. Despite a 0.8% national price decline, the hottest markets saw slight price growth (+0.9%) due to high demand and limited inventory. The Northeast and Midwest dominated the rankings, with homes in these areas selling significantly faster than the national average—spending between 33 and 51 days on the market compared to 66 days nationwide.
Jing Fu of the National Association of Home Builders (NAHB) reports that after two quarters of slowing growth, U.S. house price appreciation accelerated slightly in Q4 2024, rising 5.4% year-over-year due to persistently high mortgage rates and limited inventory. While the housing supply has improved, the 3.5-month inventory remains below the balanced market range of 4.5 to 6 months. Vermont led the nation with an 8.9% price increase, followed by New Jersey and Connecticut at 8.3%, while Louisiana saw the slowest growth at 2.1%, and Hawaii was the only state to record a decline (-4.3%).
Worried sellers
According to a Clever Real Estate survey, Jonathan Delozier of HousingWire reports that 88% of homeowners are concerned about selling their homes, with financial uncertainty and market conditions being top worries. Polling 1,000 homeowners at the end of 2024, the survey found that the most common fears include the stress of selling (42%), high transaction costs (40%), the inability to afford a new home (32%), and receiving a low sale price (32%).
Dana Anderson of Redfin reports that 14.3% of U.S. home-purchase agreements fell through in January, marking the highest cancellation rate for this time of year since at least 2017. Rising inventory and declining demand have given buyers more leverage, leading some to back out in favor of better options. Economic uncertainty, including tariffs and layoffs, has also contributed to buyer hesitation, while high mortgage rates—averaging 6.96% in January—and rising home prices have caused sticker shock.
Snejana Farberov of Realtor.com reports that home prices are cooling as nearly 17% of sellers reduced their asking prices in February, the highest share for this time of year since 2016. The South and West saw the largest increases in price cuts, with Denver, Charlotte, and Tucson experiencing the most dramatic jumps. Homes are also lingering on the market longer, with the typical home sitting unsold for 66 days—five days more than a year ago—marking the 11th consecutive month of year-over-year increases in market time.
Source: Realtor.com (March 2025)
“This high share of price reductions could signal further price softening in the coming months as sellers adjust their expectations to market conditions.”
Sydney Lake of Fortune reports that stubbornly high mortgage rates and longer listing times force more home sellers to slash prices. Inventory levels have reached their highest point since August 2019, contributing to sluggish sales and increased price reductions, particularly in markets like Denver and Boulder, where discounts range from 3% to 5%. Experts anticipate further price cuts this spring unless mortgage rates continue their downward trend, which could bring more buyers off the sidelines and reduce the need for widespread reductions.
Katie Jensen of NMP reports on Zillow data showing that homes listed in the last two weeks of May sold for an average of 1.6% more in 2023, translating to a $5,600 boost for a typical U.S. home. Late spring remains the optimal time for sellers as buyer demand peaks before Memorial Day, with shoppers eager to move before summer vacations and the new school year. However, mortgage rate fluctuations have disrupted traditional seasonal trends, shifting the best listing time in recent years.
