Fan-Yu Kuo of the National Association of Home Builders (NAHB) reports that inflation cooled to a six-month low in March, with the Consumer Price Index (CPI) rising 2.4% year-over-year, down from 2.8% in February. Core inflation, excluding food and energy, also eased to 2.8%, its slowest pace since March 2021. Housing inflation, a major component of core CPI, rose 4.0%, marking its lowest annual increase since November 2021. Despite these signs of easing, underlying inflationary pressures from tariffs, tight housing supply, and rising construction costs remain.
Source: NAHB (April 2025)
Indeed, Jesse Wade, also of NAHB, reports that building material prices for new residential construction rose 0.6% in March, following an upwardly revised 0.7% increase in February, according to the latest Producer Price Index (PPI).
Source: NAHB (April 2025)
Over the past year, input prices—including goods and services—rose 1.3%, marking a slower pace than broader inflation trends. In contrast, the PPI for total final demand across the economy increased 2.7% year-over-year, with goods up 0.9% and services up 3.6%. While construction input costs are growing more slowly, they still challenge affordability and housing supply.
Courtenay Brown of Axios reports that consumer sentiment fell 11% in early April, its fourth straight monthly decline, 30% lower than in December. Inflation expectations jumped to 6.7%, the highest since 1981, with concerns shared across all demographics and political affiliations. The drop in confidence is attributed mainly to escalating trade tensions and tariff fears despite recent official data showing cooling inflation and strong job growth.
Howard Schneider of Reuters reports that the Federal Reserve faces mounting uncertainty as one-year consumer inflation expectations surged, amplifying concerns over whether the U.S. is bracing for a renewed price shock or a broader economic slowdown. The spike, driven partly by President Trump’s aggressive tariff policies, has rattled markets—pushing up Treasury yields and weakening the dollar—raising fears that global investors may begin to shy away from U.S. assets.
Foreclosures
A new report from ATTOM Data Solutions shows that foreclosure activity rose in Q1 2025, with 93,953 properties receiving foreclosure filings—an 11% increase from the previous quarter—marking the first rise after three quarters of decline. That said, foreclosures are at historical all-time lows. Foreclosure starts jumped 14% quarter-over-quarter, with notable spikes in states like Kansas (up 117%) and Delaware (up 58%).
Source: ATTOM (April 2025)
Despite the uptick, filings remain below historical norms, thanks partly to strong home equity across many markets. The highest foreclosure rates were seen in Delaware, Illinois, and Nevada, with cities like Chicago, New York, and Houston leading in total foreclosure starts.
Megan Hunt, also of ATTOM Data Solutions, reports that in March 2025, many major U.S. metro areas saw a surge in foreclosure activity, with the top 10 cities accounting for a significant portion of national foreclosure starts. Leading the list were:
- Chicago (1,254 starts)
- New York (1,202)
- Houston (1,064)
Overall, foreclosure filings were reported on 35,890 properties nationwide in March—up 11% month-over-month and 9% year-over-year—while foreclosure starts rose to 25,070. Despite strong home equity in many markets, these increases signal mounting financial pressure in key urban centers.
The National Mortgage Professional comments on the foreclosure activity, noting that the average foreclosure timeline shortened to 671 days, down 12% from the prior quarter, continuing a trend toward quicker resolutions that began in 2020. States like Louisiana (3,038 days) and New York (1,910) still saw long delays, while New Hampshire and Texas processed foreclosures in under 120 days. Lender repossessions also rose 8% quarter-over-quarter, signaling that while overall levels remain below historical norms, economic strain is beginning to accelerate foreclosure completions.
Snejana Farberov of Realtor.com reports that while large metros like Chicago, New York, and Houston led the nation in Q1 2025 foreclosures, analysts caution that sheer volume doesn’t necessarily signal a crisis. Higher foreclosure counts in major cities stem from their larger housing stocks, and most homeowners still benefit from low interest rates and strong equity positions. Still, trouble is emerging in regions where high mortgage rates have dampened demand and caused listings to stagnate—leaving financially strained households increasingly unable to sell or refinance their way out of foreclosure.
Tariff update
Flávia Furlan Nunes of HousingWire reports that mortgage rate volatility surged last week amid renewed trade war tensions, prompting market swings not seen since the early pandemic days. Despite rapid shifts—with rates jumping from 6.63% to 6.85% in 24 hours—loan officers say borrower demand remains resilient. Some lenders hesitated to reprice amid uncertainty fully. In contrast, others noted increased home loan applications and short-term lock-ins as buyers tried to avoid future hikes.
Indeed, Diana Olick of CNBC reports that mortgage rates increased to 7.1% last week, the highest since February, amid massive volatility in the bond market triggered by sweeping tariffs, including 145% on Chinese imports. The spike follows a week of sharp swings in Treasury yields, with Friday capping what some analysts call the worst week for bonds since 1981. While inflation data came in cooler than expected, consumer inflation expectations soared to 6.7%, adding to the market’s unease.
Keith Griffith of Realtor.com reports that President Trump’s 90-day pause on most new tariffs sparked a stock market rally, sending the Nasdaq up over 8%, and offered temporary relief to the housing market. While major homebuilders saw shares surge on the news, pressure remains: a baseline 10% tariff is still in effect, and crucial sector-specific levies—like a 25% tariff on auto parts and a planned jump in Canadian lumber duties to 34.5%—will persist. Most notably, tariffs on Chinese imports used in residential construction have soared to 125%, threatening to erase cost savings from the broader pause.
Snejana Farberov of Realtor.com reports that Trump’s tariffs may ironically fuel demand for U.S. luxury real estate. As affluent investors seek refuge from market volatility, tangible assets like high-end homes are gaining appeal. Realtor.com’s Wealthy households, which hold over a third of their assets in equities, have room to expand their real estate holdings, especially with property values among the ultra-rich surging 7% in 2024. Meanwhile, foreign interest is resurging—particularly from wealthy Russians—further energizing the top tier of the housing market.
Source: Realtor.com (April 2025)
Briana Stewart and Jaclyn Lee of ABC News report that tariffs have injected uncertainty into the U.S. housing market, especially in fast-growing regions like North Carolina’s Research Triangle. While some key materials like Canadian lumber and Mexican gypsum were exempted, tariffs on steel, copper, and appliances are expected to raise construction costs by an estimated $9,200 per home. Builders and realtors are concerned about supply chain delays and shaken consumer confidence, especially among first-time buyers already stretched by high prices.
