How Is The Economic Volatility Affecting Local Real Estate?

The most recently weeks delivered some of the most turbulent & volatile economic news in recent memory, and we're still working through these negotiation of global trade policies and their effects on the stock & bond markets, as well as the broader economy.

Here's how these broader economic developments are affecting the housing economy:

Mortgage Rates: April 2025 Snapshot
Rates started the year at 7.25% in January with a steady decline through much of the Winter & Early Spring dropping to 6.65% and we were hopefully we might see a mirror of 2024 where we would get to 6% by mid-summer. 

How Tariffs Are Affecting Mortgage-Backed Securities
However, the major tariff news in early April shook the Mortgage Backed Securities (MBS) market (aka mortgage bonds) which drove up mortgage rates to 7.07%  within days. After this early spike... rates dipped below 7% though still remain volatile as they react to the ongoing major financial headlines. 

Graphic Courtesy of MBS Daily.

At the moment, we're quite thankful today's 6.94% rates are 0.5% lower than they were in April 2024 when they were 7.43%, and we remain hopeful we'll see rates continue their downward trend toward 6.0% once we can find some sort of stability with global economic policies.

Local Housing Trends: Inventory, Prices & Competition
Using new stats which show us real time market activity we can contrast the first 3 weeks of March to the first 3 weeks of April, and we can some the effects of this economic volatility:

• Inventory up by 30% from 1.3 to 1.7 months.
  This is a seasonally common increase for Spring but a bit more growth than we've seen in past years.
  
  
• List to Sale Price Ratio down 1.0% from 102% to 101%
  Again, this tends to occur as we move from Spring to Summer, and greater inventory comes to market.
  
  
• Competitive Indicators Down 8-10%
  Pending Listings with Multiple offers are down 10% and listings receiving escalation addendum are down 8%... which is likely the most notable effect.
  
  

Combining these data points, we see the market is still healthy and moving however less competitive which means a Seller with a well presented, reasonably priced property is going to see a great response and value for their property, while Buyers will likely avoid extreme competition they would have experienced over the past couple of years.


What It Means for Buyers & Sellers This Spring
While there is likely still much to develop with the broader economic policies of the current administration, the early volatility doesn't seem to be causing significant issues in our local real estate market as we continue to see a steady pace of buyer and seller activity.  While our hopes for a 20-30% increase in sales this year are no longer considered realistic, we do believe we'll be able to match the market activity from 2024 which should be sufficient to keep our market appreciating as well as creating opportunities for first time buyers,  as well as move up, downsizing and relocating clients.

Best of all, much like last year, for those with job security and ability to afford to make a move the conditions are optimal... as rates are lower than there were 12 months ago and prices are appreciating slower than at anytime of over the past 5 to 6 years. In the bigger picture, if rates drop today's movers will be able to refinance and drop their monthly costs while having gotten today's prices.