From the ValuVault — Real-Time Market Pulse: Why Home-Price Growth Is Losing Steam

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

MetroTrend Q2 ’25Key DriverValuation Tip
Seattle, WA ↘ Flat – 2 % Affordability squeeze; tech‐layoff noise Use comps ≤ 90 days and adjust for seller credits.
Austin, TX ↘ -1 % YOY Spec-build surplus plus rate shock Benchmark builder incentives before pegging value.
Phoenix, AZ → Sideways Investor pull-back; insurance hikes Bracket only 2025 closings—DOM is creeping.
Miami, FL ↗ +4 % Cash foreign buyers, tight resale supply Pair MLS with deed-recorded cash comps.

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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