“There’s no doubt that the current state of the housing market is a source of anxiety for prospective buyers and sellers,” Realtor.com senior economist Joel Berner said in the report. “Buyers are faced with high mortgage rates, which are poised to remain high due to the inflationary nature of the Trump administration’s trade policy.”
Berner clarified that he doesn’t expect a market crash in the near future, citing continued underlying demand for housing, especially among would-be buyers who’ve been sidelined by affordability issues.
“If home prices did drop, we would expect a flurry of buying activity from the pent-up households in the nation that are waiting to form, which would buoy the market naturally,” he said.
Still, household formation is lagging expectations. According to a Realtor.com economic report, Gen Z and millennial household formation fell short by 1.6 million last year, largely due to the persistent lack of affordable housing.
Recession-era patterns
Although Trump’s tariff policies have reignited market anxieties, most of the public concern appears rooted in longstanding challenges: elevated borrowing costs, limited inventory, and stretched affordability.