🚨 Recession fear?🚨

🏡 U.S. Housing Market Update – February 2025 📉📈

Mortgage Rates Decline, Affordability Remains a Challenge

30-year fixed mortgage rate: Currently averaging 6.76%, down from approximately 7% last year.

Affordability: Despite lower rates, high home prices and limited supply continue to make purchasing difficult for many buyers.

🏠 Home Prices – Modest Growth Amid Cooling Trends

National home prices: Expected to rise by 1.2% in 2025, a significant slowdown from previous years.

Regional variations: Some markets experiencing price declines, while others remain stable.

📉 Inventory Levels – Slight Increase, But Still Below Demand

Active listings: Increased by 27.5% year-over-year in February, but still not meeting buyer demand.

Months of supply: Stands at 3.7 months, the highest since 2019, indicating a shift towards a buyer's market.

📊 Sales Activity – Sluggish Performance

Pending home sales: Declined by 6.3% in January, reaching the lowest level since April 2020.

Time on market: Typical home now sits for 56 days, the longest duration since February 2020.

🏢 Rental Market – Slowdown in Rent Growth

Single-family rent growth: Increased by 1.8% year-over-year in December 2024, the lowest rate in four years.

Apartment rents: One-bedroom units up 2.9% to $1,525; two-bedroom units up 3.7% to $1,905 year-over-year in February.

⚠️ Economic Outlook – Potential Recession on the Horizon

Growth projections: Economy expected to remain largely stagnant through 2025, with growth at 3% or less.

Recession concerns: High interest rates and slowing economic activity could lead to a mild recession, impacting housing demand.

💡 Key Takeaways

Affordability: Remains a significant issue despite lower mortgage rates.

Market dynamics: Shifting towards buyers, but challenges persist due to high prices and limited supply.

Rental trends: Rent growth slowing, offering some relief to renters.

Economic factors: Broader economic conditions may influence future housing market trends.

Stay informed and consider regional variations when navigating the housing market in 2025.