The summer of ’25 and the great housing disconnect

___

Published Date 8/11/2025

During times like these, even a small boost is good news in the real estate market. But don't break out the booze just yet; it’s only a slight shift, not yet a trend.

Fannie Mae's latest Home Purchase Sentiment Index climbed from 69.8 to 71.8, suggesting people are feeling slightly less gloomy about the housing market than they were in June, as reported by Realtor.com’s researcher Joel Berner.

The good news is that fewer people are lying awake at night worrying about getting fired. Job loss fears dropped from 29% to 24% among respondents — a welcome relief after months of tariff-related jitters shaking up the labor market. When you're not constantly checking over your shoulder at work, it's easier to think about making a major purchase like a home.

Here's where things get interesting, however. While people are feeling more secure in their jobs, they're more pessimistic than ever about actually buying a home right now. July saw the most negative responses to the question, "Is now a good time to buy?" — since January. Kind of like that deer-in-the-headlights look you get when sitting down in abject hunger at a restaurant and discovering everything costs twice what you expected to pay.

But how can you blame them when they live in a world of sky-high home prices and mortgage rates that make their parents' stories of 3% pandemic-era loan refinances sound like fairy tales?

Meanwhile, sellers are stubbornly optimistic despite the fact that their homes may sit on the market longer, they’ll have to eventually cut their prices, and some might even get pulled off the market altogether.

That proverbial crystal ball? “The future remains cloudy,” says the lady in the turban when it comes to mortgage rates. Survey respondents ended up being split three ways: 39% think rates will stay put, 32% are hoping they'll drop, and 28% fear they'll climb even higher. Berner’s forecast suggests rates could fall by year's end if the Federal Reserve decides the economy needs some help. Still, it’s a far cry from the rock-bottom rates that existed just a few years ago.

Prepare for a plot twist? People are surprisingly bullish on home prices, according to Berner. “Nearly half expect prices to keep rising over the next year, while only 18% think they'll fall,” he says. Translated into realistic jargon, that means that if mortgage rates do come down as expected, all that pent-up demand could send prices soaring even higher — even into a frenzy, similar to what we saw in late 2024 when modest rate drops sparked a buying surge.

Realtor, TBWS

• < Prev
• Next >

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

American Home Lending USA, LLC - NMLS ID: 71983. To verify licensing, visit NMLS Consumer Access (www.nmlsconsumeraccess.org). Equal Housing Lender.

Jeff Beck

President

NMLS: 19488

American Home Lending USA, LLC

240 S Buchanan St, Edwardsville IL 62025

Company NMLS: 71983

Office: 618-310-0091

Cell: 618-806-2281

Email: jbeck@ahlusa1.com

Web: https://www.americanhomelendingusa.com/