Home prices are expected to continue to rise, but at a slower pace, in the upcoming S&P CoreLogic Case-Shiller Home Price Index, to be released Tuesday.
Bloomberg estimates a 3.5% annual gain in March, easing from the previous month’s 3.9%. The indicator, which tracks sales of existing single-family homes, covers the first quarter of the year and will be an indicator of President Donald Trump’s policy impacts in the market.
Here are five things to look for in the report:
Trump’s policies
The Case-Shiller index, with data through March, provides an early snapshot of how Trump’s tariff and immigration policies may be affecting the housing market, before the April 2 “Liberation Day” announcements.
Construction and housing starts — which depend heavily on imported raw materials like lumber and steel, as well as a reliance on migrant workers — face pressure from higher fees and a possible labor shortage, signaling a cooling market and limiting housing supply.
More buyers, less competition
While spring is traditionally a peak season for buying and selling homes, economic uncertainty is encouraging households to ponder their spending. Potential homebuyers may be holding off their decision to purchase.
Sales of previously owned homes declined 2% year-over-year in March, according to National Association of Realtors seasonally adjusted data. Economists said there is significant pent-up demand in the market, awaiting better conditions for release.
In its survey of site visitors, real estate listings website Realtor.com found that three in five homebuyers expected a recession within a year — the third-highest period of economic concern since 2019, following the onset of the pandemic and the Federal Reserve’s aggressive interest rate hikes in 2022 to 2023.
But some may see a downturn as an opportunity to enter the market with less competition. If the economy slips into a recession, the Fed could also lower interest rates to stimulate activity, potentially driving mortgage rates down and easing housing unaffordability.
Elevated mortgage rates
High mortgage rates have been among the most significant factors suppressing the demand side of the market. For now, 30-year fixed mortgage rates continue to hover between 6 to 7%, while applications for mortgages to buy or refinance homes have dropped. This will continue to challenge affordability and limit buyers.
Rising inventory
Despite sales remaining constrained, housing inventory is seen to be growing this season and returning to normal levels. Economists pointed out that this remains below the five to six months needed for a balanced market, but it shows that the market is adapting and showing resilience in the midst of uncertainties.
Regional divergence
Cities in the Northeast will continue to raise prices, while Sun Belt markets that saw growth during the pandemic soften. Tampa in Florida, for instance, has steadily recorded year-over-year declines.
