After President Donald Trump’s tariffs plunged the market into chaos, a pause in implementation has done little to assuage housing market forecasts.
Top economists are lowering outlooks and warning of price growth slowing, Bloomberg reported. Consumers appear poised to exert downward pressure on pricing as tariffs hang over the market and confidence wanes.
Moody’s Analytics’ Mark Zandi dropped his forecast for the year to a 1.8 percent increase in home prices. That would represent the smallest annual gain in 14 years.
First American’s Mark Fleming didn’t go as far as Zandi, but didn’t budge from his forecast of 2 to 3 percent price growth — not because of confidence, but because of uncertainty.
“I cannot see through that crystal ball right now, that’s for sure,” Fleming told the outlet. “Sometimes your best forecast is to say you don’t have one because it’s too uncertain.”
The experts’ outlook — or lack thereof — differed with the beginning of the year, when many thought the housing market would move past the worst of the doldrums of the last two years. A tumultuous economy and elevated mortgage rates have turned many more pessimistic.
Other economists are in lockstep with Zandi and Fleming. Altos Research’s Mike Simonsen and real estate professor Susan Wachter of the University of Pennsylvania’s Wharton School have cut their price forecasts to nearly zero and 2 to 3 percent, respectively.
Weakened price growth, notably, is not the same as price decreases. Even if prices only grow a little bit this year, that will look good for homeowners in comparison to the Great Recession; prices fell by more than 19 percent from the end of 2006 through 2011, according to Moody’s.
In March, the median sales price increased by 2.5 percent from the prior year, the lowest spike since September 2023, according to Redfin.
The coming weeks will prove indicative of how the market is moving, as the spring typically brings out buyers who didn’t shop for homes during the summer.
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