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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 74 June 2025 J O U R N A L revised by 0.2 percentage points, from +0.5% to +0.7%. "The markets with the strongest growth in the starter home price tier are predominantly located in the North- east or Midwest," Fleming said. "These markets include Pittsburgh, Baltimore, and St. Louis, markets that are attractive to potential first-time home buyers due to their relative affordability. However, homebuilding has also lagged in these markets, leading to high demand relative to limited supply, fueling strong house price appreciation." COULD A RECESSION TRIGGER A HOUSING MARKET REVIVAL? W ith many on edge finan- cially due to the state of the nation's economy, a new poll from Realtor.com has found that U.S. homebuyers are bracing for a potential recession, but is there a silver lining? The survey found that 63.4% of those polled expect a recession within the next 12 months, marking one of the highest levels of concern since 2019, and nearly 30% indicated that a recession would make them somewhat more like- ly to purchase a home. This is nearly twice as large as the share who report they'd be less likely to buy a home in a recession (15.8%). "Confidence in the economy has clearly taken a hit amid ongoing headlines around trade, tariffs, and rate uncertainty," said Danielle Hale, Chief Economist at Realtor.com. "But while concerns are definitely present, some buyers anticipate that a downturn can bring opportunity. Well-prepared buyers who have been waiting on the sidelines are likely motivated by personal and lifestyle needs like growing families, new jobs, or retirements and these considerations can outweigh short-term economic uncertainties." Opportunity Via Recession And while recessionary fears have heightened, 29.8% of potential homebuy- ers remain motivated and indicate they could be more likely to buy in a down- turn—with the potential for lower mort- gage rates and less competition amid an economic slowdown as key motivators. Of those polled, 54.4% claim a recession would have no impact on their decision to purchase a home—a sign that many will be driven more by life circumstances than macroeconomic shifts. Only 15.8% of respondents reported they would be less likely to buy in a recession, reinforc- ing the idea that the housing market may see continued resilience despite instabili- ty in the economic climate. Overcoming Borrower Challenges While there is a silver lining for many buyers, another aspect of the mar- ket brings challenges. Limited housing inventory continues to be the biggest roadblock for buyers, with 44.3% citing a lack of homes that meet their needs as a major concern. While listing activity has improved compared to last year, total active inventory remains 16.3% below historical norms, limiting choice and dampening momentum. Household budget constraints were reported as a major issue for 36% of surveyed homebuyers, an issue that could intensify in the coming months if interest rates remain elevated, and the impact of tariffs begins to unfold. Credit-related challenges are also grow- ing, as 13.5% of buyers cited poor credit scores as a barrier, while 8.2% strug- gled with poor credit scores as lenders tighten their standards and student loan changes impact credit health, the financing landscape may become more difficult for some buyers to navigate. The bidding wars of recent years ap- pear to be subsiding, as 7.7% of surveyed buyers identified overbidding as a top concern in Q1 2025, down from 10.4% a year ago. This trend aligns with in- creased time on the market, a moderate rise in listings, and more stable pricing; all of which point to a slower, less stress- ful home search experience. For buyers able to act amid the uncertainty, today's conditions may offer more negotiating power, more choice, and less pressure than in recent years. In analyzing the data, Realtor.com's economics team conducted a random- ized survey of site visitors to listing detail pages on the site, the Site Visitors Survey. Respondents were asked about the reasons they're visiting the site, how they have been engaged with the housing market, and how they feel that current market conditions are affecting their behavior. The survey was first launched in Q4 2019, and this report focuses on results reported by shoppers in Q1 2025. "Confidence in the economy has clearly taken a hit amid ongoing headlines around trade, tariffs, and rate uncertainty" —Danielle Hale, Chief Economist at Realtor.com