Escrow Agencies and Other Real Estate Services NAICS 531390

Jun 20, 2025 - Housing Market Advantage Flips to Buyers

• Home prices may begin to move lower as sellers outnumber buyers in the US existing home market, according to a recent report by Redfin. There are 34% more sellers than buyers, giving those shopping for a home more leverage to negotiate on price. The current number of homes on the market is the highest since March 2020. Except for April 2020, when the onset of the pandemic virtually shut down the US housing market, there have not been so few sellers since 2013. Given the imbalance between sellers and buyers, Redfin estimates that home prices will drop 1% by the end of 2025. Many homeowners have been reluctant to sell because they secured a low mortgage rate before interest rates began rising in 2022. However, some homeowners with low rates are starting to list their homes due to life changes such as new jobs, growing families, return-to-work mandates, and divorce.
• Lending activity in the commercial real estate market saw robust growth in the first quarter of 2025 despite economic uncertainty stemming from government policy and its impact on Treasury yields, according to CBRE. The CBRE Lending Momentum Index rose by 13% in the first quarter of 2025 compared to Q4 2024 and increased 90% over Q1 2024. The Lending Momentum Index tracks CBRE-originated loan closings in the US. Banks led non-agency loan closings in the first quarter with a share of 34%, followed by commercial mortgage-backed securities (CMBS) conduits (26%), life insurance companies (21%), and alternative lenders, such as debt funds and mortgage REITs (19%).

• Home builder confidence in the single-family market dropped in June to the lowest level since December 2022 amid high mortgage rates, tariff concerns, and increased economic uncertainty, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell two points to 32 in June 2025. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The HMI survey also showed that 37% of builders have reduced home prices to lure potential buyers off the sidelines, although the average price reduction of 5% has remained unchanged since November 2024.
• Single-family housing starts increased 0.4% in May, according to the US Census Bureau. However, permitting activity for single-family housing – an indicator of future homebuilding activity – fell 2.7% in May from April. Weaker permitting activity could suggest that tariffs and an oversupply of unsold new homes could be weighing on the US homebuilding market, according to Reuters. The Trump administration’s tariff policies have increased prices for key construction inputs, including lumber, aluminum, and steel. High interest rates continue to hinder demand for new homes, resulting in the highest level of unsold new homes since late 2007.