Escrow Agencies and Other Real Estate Services NAICS 531390

Apr 21, 2025 - Housing Markets Diverge on Geography

• The US housing market is increasingly defined by location, according to recent reporting by The Wall Street Journal. In some markets in the Northeast, demand is strong, and the available housing supply is tight. Land availability and zoning restrictions challenge building new supply in the Northeast. Parts of the Sunbelt have seen a building boom, but buyer interest is weakening. To attract buyers, some builders are offering incentives. According to a March survey by real estate consultancy John Burns, 78% of real estate agents surveyed in Southern Florida said existing homes on the market outnumber buyers. The same survey showed that 81% of real estate agents in the Northeast said buyers outnumber sellers. Some markets that grew the fastest over the past few years are seeing the most significant slowdowns. A broader weakness in the US housing market could be a drag on the overall economy.
• Home builder confidence in the single-family market remained in negative territory in April 2025 amid mounting concerns about tariff threats, higher input costs, and economic uncertainty, according to the National Association of Home Builders (NAHB). As measured by the NAHB/Wells Fargo Housing Market Index (HMI), home builder sentiment rose one point to 40 in March from 39 the previous month. Any HMI reading over 50 indicates that more builders see conditions as good than poor. Builders face headwinds, including high materials costs being made worse by trade strife and labor and lot shortages. Trade policy uncertainty makes it difficult for builders to price homes accurately and engage in basic business planning.

• Higher home prices could weaken demand for new homes, as low affordability was a significant headwind for the housing market before tariffs increased uncertainty, according to ABC News. On April 9, the Trump administration paused its reciprocal tariff agenda for 90 days for most countries but left in place a 10% import duty on all countries except China, which faces total tariffs of 145%. Canada and Mexico are not subject to the new 10% baseline tariffs, and goods trading under the US-Mexico-Canada Agreement will remain duty-free. Key home-building materials, including gypsum from Mexico and Canadian lumber, avoided additional levies. However, tariffs are expected to increase prices for other housing inputs, including steel, aluminum, copper, and home appliances. Before Trump’s tariff pause, a UBS analyst estimated that reciprocal tariffs could add about $6,400 to the cost of building the average house.
• In an April report, National Association of Home Builders analysis of US Census Bureau data showed that nearly half of owner-occupied homes were built before 1980. In 2023, the median age of owner-occupied homes reached 41 years, up from 31 years in 2005. Median home age has increased since the Great Recession, when new housing production dropped dramatically. Since then, home building activity has not kept pace with demand. US homes require more maintenance and repairs as they age, driving remodeling spending. The lock-in effect of low mortgage rates during the pandemic is also prompting homeowners to renovate rather than move and face a higher interest rate.