February 28, 2025
- The Realtor.com® economics team video update gives you the relevant economic and real estate information you need to know each week every Friday to navigate the housing market as a homebuyer, home seller, or industry professional.
- For the week ending February 28, Realtor.com® Chief Economist Danielle Hale discusses the latest economic data, as well as mortgage rates, home prices, new and pending home sales, and housing inventory.
- Economic data including GDP, personal income, and consumer confidence suggest economic health, but growing caution among consumers.
- Mortgage rates eased for a 6th week
- Case Shiller showed that sales prices continued to gain between 4 and 5% to end 2024 even though home listing prices were flat to lower in this period.
- The surprise in the Realtor.com February Housing Trends report, however, was an uptick in price reductions as a share of active listings. Inventory growth continued, but newly listed homes increased by only half as much as in January and weekly data showed softening new listings growth as the month progressed, suggesting waning seller enthusiasm.
- Among transaction indicators, new home sales declined in January and pending home sales also fell. Danielle shares her take on what this means for the housing market and sales in the next few months.
- Finally, many are curious about the housing market effects of changes in the Federal workforce. In the Realtor.com February Housing Trends report, we ranked markets by the share of Federal employees among all payroll jobs to have a lens through which to watch for changes in upcoming months.
VIDEO TRANSCRIPT:
- I’m Danielle Hale, Chief Economist at Realtor.com®. I’ve just returned from the International Builders Show in Las Vegas, where I shared my housing outlook and insights on custom homebuilding. This week I’m going to discuss the latest economic data, as well as mortgage rates, home prices, new and pending home sales, housing inventory, and most importantly–what it means for you.
- Revised data on GDP showed slower but ongoing economic growth in the 4th quarter driven by consumer spending. Business investment slowed, perhaps due to election-related uncertainty.
- January data on personal income and spending showed upticks in both income and the rate of savings while the Fed’s preferred inflation gauge steadied.
- Combined with consumer confidence which showed a third monthly drop in February, data suggest that consumers are growing more cautious over concerns about the outlook.
- Against the somewhat uncertain backdrop, mortgage rates eased for a 6th week, dipping to the lowest level of 2025, but are still more than half a percent above September’s low.
- In housing data, Case Shiller showed that sales prices continued to gain between 4 and 5% to end 2024 even though home listing prices were flat to lower in this period. Strength was seen in New York, Chicago, and Boston, while Tampa saw prices fall.
- A similar regional trend continued into February with asking prices showing the most strength in the Northeast and Midwest. The biggest surprise from the Realtor.com February Housing Trends report, however, was an uptick in price reductions as a share of active listings.
- We not only saw the highest share of February reductions going back to 2017, we saw a seasonally unusual increase in price reductions from January.
- Inventory growth continued, but newly listed homes increased by only half as much as in January and weekly data showed softening new listings growth as the month progressed.
- Among transaction indicators, new home sales declined in January and pending home sales also fell. Both new and pending home sales are counted when contracts are signed and suggest that home sales or closings will slow in the next one to two months. While sales slowed across the board, new construction homes, which have comprised a larger than usual share of inventory and sales, outperformed. New home sales registered on par with a pace near what was typical in 2022 and 2023, while the pending home sales index hit its lowest level since counting began in 2001–suggesting this trend will continue.
- It is still very early in 2025, but the housing market is now really showing the slowdown we anticipated from the late 2024 spike in mortgage rates. The relief in mortgage rates that we’re seeing now is expected to bring some buyers back to the market, but home sales will likely not register this pickup until the late spring or early summer.
- One last note, many are curious about the housing market effects of changes in the Federal workforce. We’ve not yet seen an impact, but given the recency of the changes, I wouldn’t expect to see anything in the data just yet. In the Realtor.com February Housing Trends report, we ranked markets by the share of Federal employees among all payroll jobs to have a lens through which to watch for changes in upcoming months.
- You can find all the details, including full reports and our housing data for download, at realtor.com/research. You can also follow us on X (formerly twitter) for real time updates. And instagram for graphics.
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