What’s Up with Real Estate? National news and local views for the week ending Friday, February 21, 2025
National Real Estate News
During the pandemic, the inventory of existing homes for sale plunged. And when fast-rising home prices and mortgage rates hit affordability, homebuilders were able to construct smaller homes and offer financial incentives. As a result, new home sales went from 9-10% of total homes sold annually to around 14% of homes sold in 2023 and 2024. [Source: Census Bureau, NAR]
Can't break 7%
Average 30-yr mortgage rates have hovered around 7% for most of the last two weeks. On the one hand, the Fed's pause (no rate cut) and the subsequent hotter-than-expected CPI inflation report pushed yields higher. On the other hand, the potential end to QT (that's "quantitative tightening", the reverse of QE) should push yields lower. [Source: Mortgage News Daily, Federal Reserve]
Builders less confident
America's homebuilders were understandably stressed by the potential for 25% blanket tariffs on Canada and Mexico and increased tariffs on China. According to the National Association of Homebuilders, around 30% of soft wood lumber (used in house framing) and 32% of appliances come from international trade. Higher home construction and renovation costs ahead? [Source: NAHB]
Local Market Trends
| Area | Median Price | Active Listings | New Listings - 5 days | Median Days on Market |
|---|---|---|---|---|
| Mesa, AZ |
$484,945
|
1454
|
105 |
43
|
| Chandler, AZ |
$577,000
|
572
|
46 |
38
|
| Gilbert, AZ |
$649,000
|
687
|
73 |
36
|
| Queen Creek, AZ |
$684,369
|
625
|
39 |
57
|
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