by Calculated Risk on 3/24/2025 11:18:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: Policy and 2025 Housing Outlook

Excerpt:

I started the year taking Fed Chair Jerome Powell’s approach to the impact of policy: I’d wait to see what was implemented before changing my outlook.

Now we know a little more. Although there is still significant uncertainty, it appears that tariffs will stay (and likely increase in early April). Deportations will likely pickup. And net legal immigration will slow sharply.
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Altos Research put out an updated inventory projection last week showing that inventory might end the year at 2019 levels!

If inventory is close to 2019 levels by the end of 2025, and sales remain sluggish, months-of-supply will move up sharply. Sales could pick up if mortgage rates decline, however, if the decline is related to a weaker economy, the increase in unemployment might outweigh any boost from lower mortgage rates.

Note: The pickup in existing home sales in February surprised many analysts (but not readers of this newsletter!). The sales increase in February doesn’t mean sales are recovering, just that analysts underestimated the seasonal adjustment for February, especially this year since there was one fewer working day in February 2025 compared to February 2024. In fact, sales were down YoY.

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