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Business Journals
23-04-2025
- Business
- Business Journals
Spring housing market stagnates despite increased listings
Homebuyers are gaining leverage and price cuts just hit a milestone, but other factors are putting a damper on what is usually a strong spring real estate market. Like much else about the U.S. economy, tariffs and broader uncertainty are weighing on home sales amid the industry's crucial spring season. In March, more than 375,000 homes were newly listed on the market — an increase of nearly 9% compared to the same time last year, according to Zillow Group Inc. (Nasdaq: ZG) research. But newly pending sales were flat compared to last year, despite slightly lower average mortgage rates in March 2025 compared to a year ago. That's despite several aspects of the market — including price cuts hitting their highest point in at least seven years — shifting to favor buyers. Inventory rose to 1.15 million homes in March, an increase of 19% from last year and the most inventory for buyers in the month of March since 2020, according to Zillow. Inventory is now about 24% below 2018 and 2019 averages for the spring housing market. Stay on top of the latest real estate news by signing up here for The National Observer: Real Estate Edition. During the four-week period that ended April 13, the median home-sale price was down from the same time a year ago in 10 of the 50 most populous U.S. metro areas, most especially in Texas and Florida, according to Redfin Corp. (NASDAQ: RDFN). That's because supply is outpacing demand in most places, especially in hot Sun Belt metros that've seen a lot of homebuilding and in-migration that's cooled since its pandemic peak. Homes today are also sitting on the market for longer. The typical home that went under contract in March had been listed for 47 days, according to Redfin. That's the slowest pace tracked by Redfin since the Covid-19 pandemic. These factors are adding up to a sluggish spring homebuying season, usually the start of the housing market's most active time of year. And while the U.S. housing market is finally shifting to favor buyers, the underpinnings for that change aren't necessarily in buyers' favor. "We really haven't seen that big spring lift that's in the traditional spring selling season, where sales spike up and you hit that peak," said Sean Fergus, executive director of economic research at real estate data firm Zonda. "It feels like it's a little bit in a holding pattern, with so much uncertainty and volatility in the market right now." Among new-home sales tracked by Zonda, 650,355 new homes sold in March at a seasonally adjusted annualized rate, a decline of 3.2% from February and down 11.5% from a year ago. In its monthly survey, Zonda also found 32% of builders lowered their prices in March, 53% held prices flat and 15% raised prices. In February, 21% of builders lowered their prices from the month prior, 61% kept prices the same and 18% raised their prices. The slowdown in new-home sales comes as builders are grappling with higher materials and labor costs because of White House tariff and immigration policy. "Some of the markets are seeing softness in home prices, like Florida and Texas, and an increase in new home inventory sitting there," said Brian Bernard, director of industrials equity research at Morningstar who tracks public homebuilders. "If the spring selling season is solid, it would work through that, but it feels like this season has been mixed, at best. If [builders] don't have a great spring selling season, that's more of a reason for pullback on starts." One positive from the amount of resale listings coming to market means the market is moving to a healthier inventory level than it's had for some time, Fergus said. More options within the greater housing market is ultimately a good thing, he added. And while new home sales have pulled back about 10% in the past year, according to Zonda, they're still 4% higher than they were at this time in 2019, Fergus said. "[More inventory] could have longer upside potential, especially if rates come down, attracting more potential buyers," Fergus said, although he added Zonda is not expecting mortgage rates to come down significantly in the near term. Mortgage rates, a key lever in the housing market, have also not moved much recently, with the 30-year fixed rate hitting an average of 6.83% last week, according to Freddie Mac data. Rates have largely been hovering in the mid- to high 6% to low 7% range for the past year. Shift to a buyer's market The change happening in the housing market is somewhat nuanced. It's not that buyer demand has recently or suddenly dropped off but, rather, demand from homebuyers isn't growing while supply is. Chen Zhao, head of economics research at Redfin, said homebuyer demand has actually been weakening since mid-2022, when interest rates began to rise. But since that time, and through 2024, supply remained low. Inventory in recent weeks and months has been picking up, through both new construction and resale homes. "You might expect that, since 2023 or 2024, as people get more used to these high mortgage rates, demand would naturally start to increase," Zhao said. "And demand would have to increase in some sense if you have more homeowners selling their homes — a lot of them have to buy another home if they're move-up buyers. Demand is somehow not increasing." That's because economic turmoil has sidelined buyers who now may be more reticent to make what's likely the biggest investment of their lives by purchasing a house, both Zhao and Fergus said. Cameron LaPoint, assistant professor of finance at the Yale School of Management whose research includes housing affordability, said in addition to consumer sentiment, major climate events, such as last fall's hurricanes and the wildfires in Los Angeles in January, may also be cutting demand for housing. He added tariff's ripple effects could make other monthly housing costs more expensive, too, such as homeowners insurance, which has already been soaring in recent years because of more severe weather risks from climate change. Homes are now spending four additional days on the market compared with this time last year, according to And more sellers are slashing their prices, with about 23% of the listings on Zillow receiving a price cut in March — the highest share for any March since at least 2018, according to Zillow. While price cuts may be welcome in a housing market laden with affordability challenges, especially since the pandemic, many would-be buyers are pausing big purchases right now. "Some are saying, if [there's] a recession, mortgage rates will fall, that will bring back housing demand," Zhao said. "If you're in a recession with the [higher] tariffs, I'm not even sure mortgage rates will fall. That also doesn't necessarily bring back demand, depending on the severity of the recession. If we assume mortgage rates stay where they are, you can have higher demand than what we're seeing right now." For buyer demand to come back meaningfully, consumers need to have more certainty about the direction of the economy, she added.
Gulf Business
21-02-2025
- Business
- Gulf Business
Missed the latest Gulf Business real estate panel? Watch it all here
The Gulf Business Business Breakfast Briefing: Real Estate Edition, held on 20 February 2025 at The Westin Mina Seyahi in Dubai, brought together top industry leaders, investors, and stakeholders to discuss the evolving UAE real estate market. Under the theme 'Breaking Ground: The UAE Real Estate Outlook,' the event provided valuable insights into the future of the property sector across Dubai, Abu Dhabi, Sharjah, and Ras Al Khaimah. The briefing featured three dynamic panel discussions, keynotes from industry leaders, and the prestigious Game Changers Awards. Attendees explored critical market trends, policy shifts, and emerging opportunities shaping the UAE's property landscape. Attendees of Gulf Business' February 20 panel gathering before proceedings kicked off. Gulf Business would like to thank its partners who made this special event possible: Alef Group, IRTH Group, ANAX Developments, Century Financial, GROHE, and Samana Developers. You can view all the photos of the event by clicking to view this If you missed the event, you can catch up on all the action by watching the videos posted below. Panel 1: Will Dubai's Property Boom Continue? Dubai's real estate sector has experienced an unprecedented boom, driven by strong foreign investment, regulatory reforms, and luxury developments. But with global economic uncertainties, fluctuating interest rates, and increasing supply, is the growth sustainable? This panel, moderated by Taimur Khan, Head of Research MEA at JLL , examined key factors influencing Dubai's real estate trajectory over the next five to ten years. Discussions covered the sustainability of the boom, the impact of golden visas on demand, and whether the surge in off-plan sales signals healthy growth or an overheating market. Speakers: Fibha Ahmed, Vice President of Property Sales, Bayut Ravi Bhirani, MD, Anax Developments Stefan Schmied, Leader IMEA, LIXIL International Dounia Fadi, Managing Director, eXP Dubai Panel 2: The New Growth Hubs – Ras Al Khaimah, Abu Dhabi & Sharjah While Dubai remains the UAE's real estate leader, other emirates are stepping up as investment destinations. Ras Al Khaimah's Al Marjan Island, Abu Dhabi's government-backed mega-projects, and Sharjah's focus on sustainable luxury housing are reshaping the landscape. Moderated by Gareth van Zyl, Group Editor, Gulf Business , the discussion compared these emerging hubs, exploring investment potential, ROI, and government incentives. Speakers: Issa Ataya, CEO, Alef Group Andrew Thomson, Partner, Head of Real Estate, Hotels & Leisure, Al Tamimi & Company Fouad Bekkar, CEO, Coralytics Panel 3: UAE's Property Market 2025 – The Next Big Moves As the UAE real estate sector matures, increased transparency, homeownership trends, and regulatory shifts are shaping its next phase of growth. The expansion of freehold areas, the evolution of RERA's regulatory role, and improved data access are transforming the market. Moderated by Anand Menon, CEO, LION EDGE Consultancy , this panel explored the future of homeownership, investment hotspots, and the balance between supply and demand. Speakers: Daniel Hadi, CEO Middle East, Engel & Völkers Louis Harding, CEO, Better Homes UAE Osman Celiker, Managing Director, IRTH Group Imran Farooq, CEO of Samana Developers Game Changers Awards & Full Event Recap The event concluded with the Game Changers Awards , recognising individuals and organisations shaping the future of UAE real estate. Winners were honoured for their contributions to innovation, sustainability, and market growth. For those who missed the live event, you can also watch the full event recording here: Stay tuned for more Gulf Business industry briefings, offering unparalleled access to expert insights and networking opportunities.
