A few weeks ago, Los Angeles real estate agent Scott Price received a rare call: “His buyer was backing out — just two days before closing.” Price explained, “This is not a common occurrence for me… It was a very unusual event.” The reason? Economic unease. Warned by his company of potential layoffs, the buyer chose to walk away from the home — and their 3% deposit.
According to data provided to CNN by Redfin, “more than 14% of all home purchase agreements in the US were canceled” between March 17 and April 13. That’s “the highest level for this time of year since 2020,” when the pandemic froze the housing market.
Market Uncertainty Tied to Tariff Policy and Recession Fears
President Donald Trump’s shifting tariff policy has contributed to growing concerns. His “on-again, off-again approach to tariffs this month has led economists to warn that everything from footwear to furniture may soon see price hikes.” Some experts anticipate a recession “as soon as this year.” But for real estate professionals, the effects are already being felt.
Even before the April 2 tariff announcement, “homebuying in 2025 was off to a slow start.” Sales of previously owned homes “dropped 5.9% in March from the prior month,” hitting their lowest March levels “since 2009,” according to the National Association of Realtors.
First-Time Buyers Hesitate Amid Market Volatility
Realtors are seeing increased anxiety, especially among younger buyers. “First-time homebuyers have been a little more skittish,” said Maddy Mixter, a Realtor based in Tacoma, Washington. “There is anxiety around if the markets will rebound and that makes younger buyers even more hesitant to cash out stocks right now.”
“For the most part,” Mixter added, “people are kind of taking a step back or being really cautious in their moves in the real estate market.”
Stock Market Losses Eat Into Down Payments
Following Trump’s announcement of “reciprocal” tariffs on all imports — later followed by a 90-day pause on most, except those on China — “stock and bond markets have experienced massive swings.” The Dow dropped 9.1% in the first three weeks of April, “the index’s worst performance for any April since 1932.”
Mortgage rates have also taken a hit. “The average rate on a standard, 30-year fixed mortgage experienced the largest one-week jump in nearly a year,” CNN reported. That’s due to the spike in the 10-year Treasury yield, which “spiked as high as 4.5%.”
“Mortgage rates are a huge factor,” said Mixter. “Every tenth of a point increase is a big deal.”
Experts Urge Caution on Major Purchases
At a time of economic uncertainty, financial planners are advising against major purchases. Douglas Boneparth, certified financial planner and founder of Bone Fide Wealth, said, “It’s a case-by-case basis. There may be individuals out there who, regardless of uncertainty, have strong savings or feel fine about their job.”
He added that for those planning to buy a home soon, it’s crucial that funds for a down payment or closing costs “shouldn’t be fully invested in the stock market.” Instead, “We need to make sure we have the resources available for that decision.”
Tariffs Also Driving Up Renovation Costs
Beyond mortgage rates, Trump’s tariffs are also affecting the price of goods used in home renovations. According to New York-based Realtor Matthew Bizzarro, “The main talk I’ve heard about tariffs is from folks who are buying places that need to be gut-renovated… that’s creating pause.”
Mixter echoed this sentiment, noting that “many of her first-time homebuyers are no longer considering homes that will require renovations.”
“Classically, starter homes need a little bit of shining up,” she said. “But I’ve seen a lot of first-time homebuyers that are really cautiously looking at homes that they could just move right in to… just because of the climate and the uncertainty of what’s happening moving forward.”
Some Still See Real Estate as a Safer Bet
Despite the volatility, there are exceptions. Mixter noted that “her office has seen interest in real estate purchases among some older homeowners who recently cashed out some stock holdings amid market gyrations.”
“For now, they see real estate as a sound investment alternative,” she said.
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