The housing market is showing signs of favoring buyers, but concerns about the economy’s impact on job security and affordability are causing some potential buyers to hesitate. According to economists, home price growth has slowed, and mortgage rates have retreated from recent peaks.
In the last four weeks, the median sale price for homes increased by 3.7% compared to the same period last year, but that is the smallest increase in nearly five months. The average 30-year fixed rate mortgage has also decreased to 6.87%, down from its peak of 7.04% in January.
However, experts warn that buyers still face an affordability challenge. Mortgage applications have fallen by 6.6% from last week, and some buyers are putting off home purchases due to economic uncertainty. The possibility of trade wars and changes in government spending is causing anxiety among consumers.
To navigate the current market, buyers can try negotiating hard on price, exploring additional concessions such as covering closing costs or agent fees, or considering new builds with favorable loan terms. With more inventory available, buyers have “a little bit more bargaining power in the market,” according to senior economist Orphe Divounguy at Zillow.
Despite these promising signs, some experts attribute the slowing of home price growth and mortgage rates to concerns about the broader economy, particularly from the White House. As Chen Zhao, an economist at Redfin, notes, “A lot of it is coming from the White House,” suggesting that economic worries are driving buyers’ decisions.
Source: https://www.cnbc.com/2025/02/20/high-costs-economic-worries-have-homebuyers-retreating.html