After disruptions that led to a below-average spring market, a late-summer uptick in home sales has been welcome news for realtors and homeowners. But there is concern that a government shutdown could once again slow things down.

Despite all this, and interest rates hovering near 6%, Burr said that coming out of the summer, people have begun to buy and sell homes. But he’s worried the shutdown could make this recovery short-lived.

“The main thing is that the shutdown is going to affect buyer confidence in the future,” said Corey Burr, senior vice president at TTR Sotheby’s International Realty.

Burr said the real estate market in the region is heavily influenced by what happens on Capitol Hill and changes in federal employment.

“Our spring market was interrupted by Liberation Day in early April, and what is typically the hottest time of our market, year in and year out, became dead for about a six-week period,” Burr said.

“Liberation Day” is a phrase President Donald Trump has used to describe April 2, the day a set of import tariffs was rolled out.

Buyer confidence also took a hit from the DOGE cuts, which Burr said had a “serious psychological effect” on buyers.

“It really just put our market into a frozen mode. Buyers got very nervous,” he said.

Burr pointed to Silver Spring, Maryland, as a bellwether for the region. He said the area has seen a longer time on the market for moderately-priced homes, which he believes is partly due to federal layoffs.

He also expressed concern about the possibility of additional layoffs, noting that federal agencies have been instructed to prepare for staff reductions as part of the shutdown response.

“The specter of even more layoffs is going to affect the region adversely,” Burr said.

He said what’s needed now is what he calls a “Goldilocks economy,” with inflation down to 2%, moderate job growth, and mortgage rates in the mid-5% range. That, he said, would give the Federal Reserve the flexibility to lower interest rates further.

“If we can achieve a Goldilocks economy, I think that the rate on the 30-year fixed is going to come down more into the mid-fives, and that has proven to be a number where existing homeowners are willing to trade in their low interest rate that they’ve had for the last several years in order to right-size their housing to where they are in their lives,” Burr said.

But for now, Burr said the full impact of the shutdown and the end of government payments for federal employees affected by the DOGE cuts remains to be seen.

“It would be very hard to take if this recent surge in activity gets interrupted by a lengthy shutdown by the government,” Burr said.

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Is 2025 the year to buy, sell, or hold tight in the housing market? It’s the question on everyone’s mind. Right now, the housing market 2025 is marked by a significant amount of uncertainty. A Bank of America report indicates that 60% of homeowners and prospective buyers are unsure about whether it’s a good time to buy, a three-year high in hesitancy. But amidst this confusion, there’s a glimmer of optimism, particularly among prospective buyers.

Bank of America Flags Rising Housing Market Uncertainty in 2025

What’s behind this mixed bag of feelings? Let’s dive into the key factors shaping the market and what you need to know to make informed decisions.

Why Are People So Confused?

The current housing market feels a bit like navigating a maze in the dark. Several factors are contributing to the general sense of uncertainty:

• Interest Rate Volatility: Interest rates have been on a rollercoaster, impacting affordability and making it difficult to predict future mortgage costs.
• Home Price Fluctuations: While some areas have seen prices stabilize or even dip slightly, others remain stubbornly high. This inconsistency makes it challenging to determine a fair price.
• Economic Concerns: Lingering questions about inflation and potential economic slowdowns cast a shadow over the market, making people cautious about making large financial commitments.
• Severe Weather and Natural Disasters: Concerns about the impact of severe weather and natural disasters has become top-of-mind for many homeowners and prospective buyers around the country.

It’s no wonder people are hesitant! Personally, I’ve felt the same way. Even as someone who follows the market closely, it’s tough to make confident predictions when things are so unpredictable. The average person just looking to buy a house may have an even tougher time breaking through these clouds of uncertainty.

The Buyer’s Perspective: Cautious Optimism and Compromises

Despite the uncertainty, there’s a vein of hope running through the prospective homebuyer population. The Bank of America report points out that 52% feel the market is better than it was a year ago. This optimism stems from the expectation that prices and interest rates will eventually fall.

• Waiting Game: A whopping 75% of prospective buyers are playing the waiting game, anticipating more favorable conditions before jumping in.
• Gen Z’s Innovative Strategies: Younger generations, in particular, are finding creative ways to overcome financial hurdles:
  • Extra Jobs: 30% of Gen Z homeowners took on an extra job to cover their down payment.
  • Co-Buying with Siblings: 22% of Gen Z homeowners purchased with siblings, a trend that’s been on the rise.
  • Living at Home: 34% of Gen Z prospective buyers would consider living with family while saving to buy.
  • Family Loans: 21% of Gen Z plan to get a down payment loan from family, compared to 15% of the general population.

I think this shows a lot of resilience and determination. The dream of homeownership is clearly still alive and well, especially among younger folks, but they are getting super creative and trying to get there by any means possibly, even if has to be with roommates, living back with their parents, taking out multiple jobs, etc.

The Seller’s Dilemma: Navigating a Shifting Market

For homeowners considering selling, the market situation is equally complex. While demand remains relatively strong in some areas, sellers may need to adjust their expectations.

• Realistic Pricing: Overpricing a home can lead to it sitting on the market for longer, potentially forcing price reductions later on. Consulting with a local real estate agent for an accurate market analysis is crucial.
• Highlighting Key Features: With severe weather being top of mind for buyers, improvements that protect against severe weather, like storm shutters or reinforced roofs, can be major selling points.

Interest Rates and the Fed: The Elephant in the Room

The Federal Reserve’s decisions regarding interest rates continue to be a major driving force in the housing market. Any signals about future rate cuts or pauses can significantly impact buyer sentiment and borrowing costs.

• Inflation Data: Keep a close eye on inflation reports, as they heavily influence the Fed’s actions.
• Fed Meetings: The Fed’s meetings and press conferences provide valuable insights into their economic outlook and policy intentions.
• Mortgage Rate Trends: Follow daily mortgage rate trends to get a sense of borrowing costs and how they are reacting to market news.

As someone who’s followed markets for a while I predict that small, incremental rate hikes might be the case to reduce inflation in a smooth way rather than causing abrupt shifts that will affect the economic status of everyday people.

The Impact of Severe Weather on Homebuying

One of the more alarming trends is the growing concern of severe weather. According to Bank of America’s report, 62% of homeowners and prospective buyers are concerned about the impact of severe weather and natural disasters on homeownership.

• Location, Location, Location: Around 73% feel it is important to buy in areas where there is a lower risk of these events occurring.
• Changing Preferences: 38% have changed their preferred home purchasing location due to the risk of severe weather in the area.
• Past Damage: Among current homeowners, nearly a quarter (23%) have personally experienced property damage or loss in the last 5 years due to severe weather events.
• Preparation: 65% of current homeowners are taking measures to prepare their home for the risk of severe weather.

This is a significant shift in priorities. Buyers are now factoring in climate risk when deciding where to buy, and homeowners are investing in measures to protect their properties. It’s no longer just about finding the perfect house; it’s about finding a safe and resilient home.

The Future is Still Being Written:

It’s important to remember that the housing market 2025 is a moving target. There are several factors that could influence the market in the coming months:

• Employment Growth: A strong job market can boost consumer confidence and increase demand for housing.
• Housing Supply: Any increase in new construction could help to alleviate supply constraints and moderate price growth.
• Government Policies: Government policies, such as tax credits or down payment assistance programs, can impact homeownership affordability.

Key Takeaways for Navigating the Housing Market in 2025:

• Stay Informed: Keep up-to-date on market trends, economic indicators, and interest rate developments.
• Seek Professional Advice: Consult with a trusted real estate agent, mortgage lender, and financial advisor.
• Be Patient and Flexible: Be prepared to adjust your expectations and timelines as the market evolves.
• Consider Your Personal Finances: Make sure you’re financially prepared for the responsibilities of homeownership.
• Factor in Climate Risk: Assess the potential impact of severe weather on your property and location.

The housing market is still a tricky thing to maneuver. Being conscious of all external factors and relying on the correct insights is key to navigating this market to your own benefit.

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South Florida’s housing market is tilting toward buyers, fueled by falling interest rates, rising inventory and sellers accepting less than asking prices.

The shift comes after years of soaring costs that kept many would-be homeowners on the sidelines.

Jason Collier is among them. He began his search two years ago after moving to Broward County from Philadelphia, but rising prices made finding a home within his budget difficult. Now, with the Federal Reserve’s recent quarter-point rate cut—and more expected later this year—he is reconsidering his timeline.

“Interest rates going down even a fraction of a percent makes that monthly payment just that much more affordable, makes it that much more realistic to execute on this soon,” Collier said.

Realtors say South Florida is in a buyers’ market

Realtor Justin Brooks with The Brooksy Group said the region has shifted into a buyers’ market. He said inventory is up about 13 percent, sellers are receiving roughly 5 percent less than asking price and homes are taking longer to sell.

Mortgage rates, though not directly tied to the Fed’s decision, are also down to about 6.5 percent. That’s a market many potential homebuyers who were hesitant or previously priced out have been waiting for, Brooks said.

“With this interest rate decline we’re going to have a lot of buyers reentering our market; approximately one to two million buyers are now going to reenter and position in our market locally in South Florida,” Brooks said.

Pending sales rise as buyers return

Other buyers are feeling that same confidence.

According to Florida Realtors, pending sales of single-family homes were up nearly 10 percent in August compared with the same time last year. The average sale price was about $584,000, up 3.5 percent from 2024.

Brooks said buyers may want to act quickly.

“We could be in a situation where there are multiple offers again, where there’s over asking prices, where the door opens on a good value and there’s a line of people looking to purchase,” Brooks said.

He also recommends checking eligibility for homebuyer programs such as Hometown Heroes or Florida Assist, which can help offset costs.