This year was expected to be a rebound for the US real estate market. However, faced with rising home prices, historically high mortgage rates, and growing economic uncertainty, homebuyers have retreated to the sidelines, leading to a stagnant market. Meanwhile, prices have refused to ease, creating a complex market picture.
△ Surge in Listings
The value of unsold homes in the US has reached $700 billion, and the proportion of homes listed for more than 60 days has increased to 44%, creating a glut of homes on the market. According to the latest data from the real estate platform Redfin, US sellers are holding a record $700 billion worth of unsold homes. Nationwide, the number of unsold homes has reached a nearly five-year peak. Furthermore, 44% of homes (approximately $331 billion worth) have been on the market for more than 60 days, a percentage that has continued to rise since 2020.
△ High Prices Suppress Demand
Despite the increase in listings, prices have not significantly declined, leading to a strong wait-and-see attitude among homebuyers. High mortgage rates are also suppressing demand. Redfin real estate agents said: "Homebuyers generally take a wait-and-see attitude and will only buy when necessary. Even some buyers who have the intention to buy a house choose to give up for various reasons after signing the contract." In addition, high mortgage interest rates are also an important factor suppressing buyers. The 30-year mortgage rate has remained basically stable this year, maintaining at around 7%, and authoritative institutions predict that the rate will only drop slightly at the end of the year.
Market uncertainty and influencing factors
△ Interest rate and housing price status
House prices rose by 1.4%, and there was a lack of buyers in the housing market; high mortgage rates remained at around 7%, and are expected to fall slightly by the end of the year. Goldman Sachs analysts expect that the most popular mortgage rate will drop from the current 6.9% to 6.75% by the end of this year. However, this drop may still be insufficient to encourage buyers to enter the market. Although analysts have predicted that interest rates will fall as inflationary pressures ease and the Federal Reserve's monetary policy is loose, the uncertainty caused by President Trump's tariff policy has caused the bond market to reprice, resulting in the disruption of expectations of interest rate cuts.
△ Tariff policy and economic factors
Trump's tariff policy has led to market uncertainty, weak consumer confidence, and a deviation from historical data, which is unfavorable to the real estate market. According to CME FedWatch, an online tool that tracks and predicts the Federal Reserve's interest rates in real time, the market expects the first rate cut in 2025 to be postponed to September. Economic uncertainty has further exacerbated homebuyers' concerns. This year, the market has shown a divergence between "soft data" and "hard data", that is, consumer confidence and inflation expectations have been weak, which is in stark contrast to the historical data used by the Federal Reserve for decision-making.
△ Increased market volatility
Bond market volatility has pushed up loan rates, and housing price uncertainty has suppressed market activity. Future trends need to pay attention to inflation and consumer confidence data. Volatility in the bond market has led to a widening gap between 30-year mortgage rates and 10-year Treasury yields, which has driven up loan rates. This week, a series of important data on inflation and consumer confidence will be released, which may provide more reference for the future direction of the market.
