Potential home purchasers are choosing to avoid the property market.
HOST:
Many people nowadays are doubts about committing to a home purchase given the current circumstances. There are several factors dampening their enthusiasm – high prices, high-interest rates, economic and political worries, and more. NPR's Laurel Wamsley spoke with a couple of such potential homebuyers who have put their house hunts on hold due to the unsettling political climate and its impact on their job security.
LAUREL WAMSLEY, BYLINE: Let's call D and his wife, federal contractors in their early 40s, living just outside Boston in a two-bedroom condo they bought 13 years ago. They don't have to move, but having a yard has been their dream for a while.
D: We'd love a white-picket fence yard, to grow some vegetables.
WAMSLEY: The spring would have been the perfect time for them to buy, as they had saved up for a down payment and a plethora of homes were hitting the market. But their search has taken a pause for the time being.
D: With the turmoil in government right now and assessing that, we've pretty much given up. Add to that the ballooning interest rates, and it's become an unfavorable situation for housing purchases.
WAMSLEY: Mortgage rates are now nearing 7%, while under the Trump administration, mass firings of federal workers and cancellation of government contracts have added to the uncertainty about job security.
D: So far, things look okay, but who knows? With each press release, concern ebbs and flows.
WAMSLEY: It's difficult to make a big financial commitment when it seems the economic and political landscape could shift at any moment. 35-year-old Jeffrey and his husband, living in Dayton, Ohio for five years, had hoped to buy their first home. But with the slew of executive orders, like those regarding DEI and gender identity, and the attempts to roll back civil rights protections, they feel their rights as a gay couple are being threatened.
JEFFREY: If they're coming for trans people, if they're coming for people of color, like, how is it not going to get to gay people too?
WAMSLEY: They asked to remain anonymous out of fear for their safety. They had been considering settling down in Dayton but have withdrawn their plans due to the alarming legal measures taken by the state, such as the transgender bathroom and sports ban. A ban on gender-affirming care for trans youth is already in effect, pending a legal challenge. Disheartened by these developments, they are now contemplating relocating overseas.
JEFFREY: It's hard to plan for the future when things feel so unsteady, and an executive order can just attack my rights on a whim. The constant uncertainty is overwhelming.
WAMSLEY: Despite the fears and uncertainties, most aren't leaving the country just yet. But the political and economic instability has contributed to a slowdown in U.S. home sales this spring. This April witnessed the slowest existing home sales in 16 years, with May's numbers looking equally dismal, as pending sales have also dropped[4].
As potential buyers continue to grapple with this tough economic environment, the political situation is an additional factor that's making them hesitate before diving into the turbulent waters of the housing market.
Laurel Wamsley, NPR News. Transcript provided by NPR, Copyright NPR.
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- Goldman Sachs forecasts mortgage rates will reach 6.75% by the end of 2025.
- Potential buyers are waiting for more favorable economic conditions before entering the housing market.
- The introduction of tariffs and a spike in Treasury yields resulted in an increase of mortgage rates on April 9, 2025.
- Reduced market demand and the reluctance of sellers to list properties have contributed to a shrinking supply of homes available for purchase, exacerbating the challenges faced by potential buyers.
- The current political climate, along with economic worries, has led many to question their commitment to investing in real estate, as they grapple with high-interest rates and an uncertainty about job security.
- Prospective homebuyers are closely monitoring government policies and legislations, as they seek stability and promising economic conditions before making a significant financial move in the housing market.
- The ongoing war and conflicts, as well as crime and justice issues, have further contributed to these concerns, causing a reluctance among some would-be buyers to commit to home purchases.
- In light of the political instability, finance experts predict a slowdown in the U.S. housing market, as potential buyers hesitate to invest amidst the uncertain economic landscape.
- The ongoing economic uncertainties, together with the financial impacts of war and conflicts, have raised questions about the efficiency and sustainability of investing in the housing market during this period.
