Home Prices Stagnate

Home price growth slowed down at the beginning of the year. According to real estate marketing platform Zillow, year-over-year prices increased by 3.9% as of February, down from the 4.1% recorded the month prior. Looking ahead, Zillow predicts home price growth to fall even further. Experts predict a 1.9% drop in home prices by the end of 2025, with a 1.6% decrease expected over the next 12 months.

Home prices are increasingly untenable to potential home buyers. Waning consumer confidence, heightened insecurity over economic uncertainties and the future of household budgets are impacting the consumer housing market. Unlike its normal countercyclical behavior, these early signs of an economic downturn have not brought lower mortgage rates along with it.

Recently, more affluent buyers have been able to leverage strong stock portfolios to outbid other buyers. However, sweeping tariffs have led to a stock market slump, affecting the down payment savings for the 29% of home buyers who use stock portfolios as a down payment source (2024 Zillow Consumer Housing Trends Report).

The trends of the next few months are incredibly important as experts grapple with another potential turning point in the macro economy and for housing. Read more