Season 3, Episode 4: Real Estate Prices Are Slowing—Here’s Why
The Big Picture (May 2025)
- 30-year fixed mortgage: 6.92 % (Freddie Mac, 9 May) — buyers now spend ≈32 % of income on housing (lenders prefer ≤28 %).
- U.S. home-price growth: +2.5 % YOY in March vs. +5.7 % a year earlier.
- Inventory: 4.2 months of supply—better than 2024’s crunch but still “seller-leaning.”
- CoreLogic 2025 forecast: about 3.7 % annual appreciation; double-digit jumps are over (for now).
- Commercial watch: rising debt costs push hotel cap rates toward 10 %—underwrite income hits.
Region-by-Region Momentum Meter
What It Means for Your Next Deal
For Buyers
- New-construction builders are dangling rate buydowns & closing-cost credits—often worth 2-3 points on the note rate.
- Lock now; refi later if MBA’s 6.4 % Q4 projection materializes (just don’t bank the farm).
For Loan Officers / Appraisers
- Comp hygiene matters—stick to 2025 sales to avoid overstating appreciation.
- In cooling metros, flag seller concessions; underwriters are hair-trigger on inflated net adjustments.
- Commercial: rising cap rates = lower values; document NOI hits carefully.
Quick Scripts for Client Calls
- Buyer cites higher Zestimate:
“Algorithms look back 12 months. Today’s 7 % rates cap buyer budgets. Let’s run fresh comps.” - Broker questions conservative appraisal:
“Our comp set is all 2025 closes—last summer’s spikes violate FNMA’s ‘current-market’ rule.” - Investor eyeing Austin flip:
“Factor builder giveaways into ARV—resales must compete with brand-new incentives.”
🔗 Episode audio: ValuVault – Real-Estate Prices Are Slowing—Here’s Why
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