5 Things To Know About Home Prices

Home prices likely continued to rise this February – a period coming before the implications on new tariffs imposed by the Trump administration began to take hold. Some economists predict that Tuesday’s release of the S&P CoreLogic Case-Shiller U.S. The National Home Price Index will show that home prices continued to increase 4.70% year-over- year in February, which was higher than the 4.1% increase in January. 

Though tariff implications are likely not shown yet in this report, buyers will be watching closely for a read on the spring housing market before economic uncertainty could build. 

Here are 5 things to look out for:

Expect home prices to increase:

Despite looming economic uncertainty, economists predict home prices will continue to rise in the National Index, 10-city index, and 20 city-index. Tight inventory levels will put pressure on buyers to find their place in the market amid increased competition for limited listings. 

Inventory Levels:

In Los Angeles, wildfires have sent home prices into a frenzy due to rebuilding concerns and shrinking inventory. On top of that, new tariffs on imported construction materials are causing homeowners to hold off on selling. The Case-Shiller report will give future homebuyers insight on whether these economic and environmental factors have contributed to price instability in the market. 

Mortgage Rates: 

Mortgage rates in February showed slight declines as President Trump has put pressure on Fed Chair Powell to cut rates. In February 2025, mortgage rates for a 30-year fixed mortgage generally fluctuated around 6.75% to 6.94%, with some days showing slight decreases. Though many borrowers are seeking relief, economists warn a less-independent Fed can lead to higher borrowing costs, as investors worry that inflation may spike in the future. As a result they demand higher yields to own Treasury securities, or safer assets.

Regional Differences:

Though the National Index shows home prices are generally increasing at a slower level, regional differences are becoming sharper. Inventory build up in Tampa, Texas and other states across the Sunbelt could weigh on buyer activity.

Buyer Activity:

Despite climbing prices – buyer confidence is eroding due to economic insecurity and job concerns. This March, the Fannie Mae Home Purchase Sentiment Index dropped 3.5 points to 68.1%, one of its lowest levels in over a year. Thirty-two percent said they were concerned about losing their job, the highest share on record. Combined with a 32% drop in consumer sentiment so far this year — the sharpest decline since the 1990 recession — the housing market faces growing risks of a demand slowdown.