After years of high prices and bidding wars, homebuyers are finally starting to see a shift in the housing market. In 2025, homebuyers were able to negotiate prices down more than at any other point in the past 13 years, according to new Redfin data (1). As demand cools, homes are increasingly selling below list price. In certain markets, inventory is rising. And some sellers are starting to adjust expectations after years of rapid price growth. Must Read That shift follows a dramatic run-up in demand ...

Core Insights - The article discusses the current state and future outlook of the housing market, highlighting four key signals that will influence housing prices and buying decisions in the coming years. Group 1: Interest Rates and Borrowing Costs - Mortgage rates are at historical lows, with the 5-year LPR at 3.5% and first-time home loan rates as low as 3.05%-3.2%, significantly lower than rates above 5% in previous years, resulting in annual savings of over 20,000 yuan on a 1 million yuan loan [3][4] - The reduction in mortgage rates is expected to ease the financial burden on over 60 million mortgage households, indicating a low-cost home buying window is currently available [3] Group 2: Policy Adjustments - The Ministry of Housing and Urban-Rural Development has announced the removal of unnecessary administrative restrictions, with over 95% of cities lifting purchase and loan limits, and the down payment for first homes reduced to 20% [3][4] - Various cities are offering incentives such as tax rebates and increased loan limits to support home purchases, reflecting a commitment to restoring market confidence [3][4] Group 3: Housing Price Trends - The decline in housing prices is slowing, with first-tier cities experiencing a year-on-year decrease of 2.1% in new home prices and a 0.5% decrease in second-hand home prices, indicating signs of market stabilization [4][5] - The differentiation in housing prices is becoming more pronounced, with core cities stabilizing while smaller cities continue to adjust due to high inventory levels [5][6] Group 4: Supply and Demand Dynamics - The government aims to start over 2 million units of affordable housing, which will reshape the supply-demand landscape in the housing market [6][7] - The introduction of affordable housing options is expected to change the demand structure for commercial housing, as these options will cater to new citizens, young people, and low-income groups [8][9] - The market is transitioning to a dual-track system of affordable and commercial housing, with prices increasingly determined by market supply and demand [10]

Core Insights - The housing market is experiencing a downturn, with existing home sales in January dropping 8.4% from December, reflecting ongoing affordability challenges and low inventory levels [1][2] - Economists anticipate a potential improvement in sales due to lower mortgage rates, but affordability issues are expected to persist [1] Group 1: Sales Performance - Existing home sales in January were at an annualized rate below 4 million, maintaining activity near decades-low levels [1] - The decline in sales is attributed to poor weather conditions and limited inventory, which has kept prices elevated [1][2] Group 2: Affordability Trends - Mortgage rates averaged 6.1% in January, down from nearly 7% a year ago, contributing to improved affordability conditions [1] - The median home price in January was $396,800, reflecting a modest increase of 0.9% from the previous year [1] Group 3: Inventory and Market Dynamics - Inventory levels increased by 3.4% over the past year, but remain significantly below pre-pandemic averages, limiting home price appreciation [1] - The cold weather in early January impacted home sales, particularly in the Midwest and Northeast regions, with expectations that warmer weather may boost sales [1][2] Group 4: Future Outlook - Economists predict a thaw in market conditions this spring, but significant improvements in affordability are seen as distant [1] - Low inventory levels are likely to continue affecting the market, with a cap on how much sales activity can improve in the near term [1]

Core Insights - The latest inflation data indicates a continued easing of price pressures, particularly in essential categories, providing consumers with some relief [1][2] - The Consumer Price Index (CPI) rose 2.4% year over year in January, with a monthly increase of 0.2% on a seasonally adjusted basis, suggesting a pattern of restrained inflation [2] - Essential costs, including housing, food, and bills, have historically consumed a significant portion of household income, particularly for consumers earning less than $50,000 annually [3] Inflation Trends - January's CPI report shows signs of stabilization in critical areas, with energy prices declining 1.5% for the month and 0.3% over the past year, which can positively impact household budgets [4] - Food prices increased modestly, with food and beverages rising 0.2% in January and 2.8% year over year, indicating a normalization after previous volatility [5] - Shelter costs remain elevated but show slower growth, with shelter prices rising 3% over the past year and 0.2% in January, suggesting easing housing-related pressures [9] Service Sector Inflation - Inflation in service-oriented categories remains elevated, with food away from home increasing 4% year over year and medical care services rising 3.9%, indicating persistent cost pressures in labor-intensive sectors [10][11] - Goods-related inflation has shown clearer deceleration, while services inflation continues to exert pressure, highlighting a nuanced inflation narrative [11] Consumer Financial Behavior - Consumers are increasingly utilizing flexible payment mechanisms to manage cash flow, with 31% using credit card installment plans and 14% using buy now, pay later (BNPL) products [12][13] - The adoption rates of installment structures are notably higher among millennials, with 42% of bridge millennials utilizing these mechanisms [13] - The use of installment plans is viewed as a budgeting tool rather than a sign of financial stress, allowing consumers to align payments with income cycles [14] Overall Outlook - January's inflation data and consumer finance trends suggest a gradual recalibration rather than acute disruption, with inflation persisting in shelter and services but moderating in essential categories [15] - Consumers are adapting their financial behaviors through spending prioritization and credit utilization, indicating a demand for flexibility and predictability in a still-elevated price environment [16]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **real estate market in China**, specifically analyzing **negative equity** and home price declines in six major cities: **Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, and Chengdu**. These cities represent about **13% of China's urban population** and approximately **30% of the country's urban housing wealth** [2][8]. Core Insights - **Negative Equity Definition**: Negative equity occurs when home values fall below outstanding mortgage balances, posing significant risks to the economy and financial system, especially when combined with job loss [2][3]. - **Historical Context**: In the US, **25% of mortgage borrowers** faced negative equity during the peak of the housing crisis in 2010, highlighting the potential severity of such situations [2][4]. - **Current Situation in China**: - Borrowers who purchased homes before **2021** generally retain considerable home equity despite a **30% peak-to-current price correction** due to high down payment ratios historically [2][20]. - Those who bought homes during **2021-2023** have seen significant erosion of their down payments due to recent price declines [2][20]. Future Projections - If home prices decline by less than **10% in 2026**, the negative equity issue is expected to remain manageable. However, a decline greater than **10%** could significantly increase the share of borrowers facing negative equity, indicating a **nonlinear threshold effect** [2][29][26]. City-Specific Analysis - **Tianjin**: Home prices peaked early and have dropped nearly **50%**, leading to negative equity for average borrowers from the **2017-2019 cohorts** [20]. - **Chengdu**: Despite price declines, all cohorts still maintain at least **15% equity** relative to their purchase price on average due to higher down payments and milder price drops [20]. - **Price-to-Income Ratios**: Tier-1 cities like Beijing and Shenzhen have high price-to-income ratios above **15**, while Tianjin and Chengdu are more affordable [11]. Key Findings 1. **Down Payment Impact**: Due to substantial down payment requirements (at least **30%** in all six cities during **2017-2023**), negative equity remains relatively rare as of **2025**, despite significant home price declines [20]. 2. **Home Equity Variability**: Home equity levels vary significantly by purchase year. Buyers before **2021** retained at least **20% equity**, while those who bought during **2021-2023** lost about **two-thirds** of their down payment value [20]. 3. **Cross-City Differences**: Significant differences exist across cities regarding home price trajectories and equity positions, with Tianjin facing more severe declines compared to Chengdu [20][12]. Additional Considerations - **Mortgage Behavior**: Many Chinese households pay down mortgages ahead of schedule, which reduces the risk of negative equity. This behavior may mitigate systemic risks to banking and financial stability, although local stresses could still arise [30]. - **Nonlinear Relationship**: The relationship between home prices and negative equity is nonlinear, with significant implications for borrower behavior and financial stability [29][26]. Conclusion - The analysis indicates that while the current situation regarding negative equity in China is manageable, future declines in property prices could lead to increased risks. The high down payment ratios historically have provided a buffer against widespread negative equity issues [29].

Core Insights - U.S. existing home sales fell to the lowest level in over two years, with an 8.4% drop in January to a seasonally adjusted annual rate of 3.91 million units, below economists' expectations of 4.18 million units [1][2] Group 1: Sales Performance - Home sales decreased 4.4% year-over-year, reflecting a significant decline in market activity [2] - The decrease in sales is attributed to low inventory levels, despite improving affordability conditions due to wage gains and lower mortgage rates [3] Group 2: Inventory and Pricing - Existing home inventory fell by 0.8% to 1.22 million units, although it was up 3.4% compared to the previous year [5] - The median existing home price rose by 0.9% year-over-year to $396,800, marking the highest price for any January [5] - At the current sales pace, it would take 3.7 months to exhaust the existing home inventory, an increase from 3.5 months a year ago [5] Group 3: Buyer Demographics - First-time buyers represented 31% of sales, an increase from 28% a year ago, indicating a slight improvement in market participation [6] - All-cash sales accounted for 27% of transactions, down from 29% a year ago, while distressed sales made up 2% of transactions, down from 3% [6]

Sales of previously owned US homes fell in January by the most in nearly four years, a month marked by historically cold temperatures and a massive winter storm. https://t.co/E1GmStaHUy ...

Core Viewpoint - The housing market is anticipated to improve slightly this year despite a bleak start [1] Group 1 - The beginning of the year shows negative trends in the housing market [1] - Expectations for the housing market indicate a potential for slight improvement later in the year [1]

Core Insights - Sales of previously occupied U.S. homes fell sharply in January, with an 8.4% decline from December to a seasonally adjusted annual rate of 3.91 million units, marking the largest monthly drop in nearly four years [1][2] - Year-over-year, sales decreased by 4.4% compared to January of the previous year, falling short of the expected pace of 4.105 million units [2] - The U.S. housing market has been experiencing a sales slump since 2022, attributed to rising mortgage rates, high home prices, and a chronic shortage of homes [4] Sales Performance - Home sales slowed across all regions: Northeast, Midwest, South, and West [2] - Sales have remained close to a 4-million annual pace since 2023, significantly below the historical norm of 5.2 million annual sales [5] Home Prices - Despite the decline in sales, the national median sales price increased by 0.9% in January from a year earlier, reaching $396,800, marking 31 consecutive months of annual price increases [3] Mortgage Rates - The average rate on a 30-year mortgage briefly dropped to 6.06% in January, the lowest since September 2022, but has since risen slightly, remaining just above 6% [6] Affordability Challenges - Affordability continues to be a significant challenge for many potential homeowners, particularly first-time buyers lacking equity from previous homes [7] - Economic and job market uncertainties are also contributing to the hesitation among prospective buyers [7]

Core Insights - The U.S. housing market is facing challenges due to high home prices, declining supply, and weakened consumer confidence [1] Sales Performance - Sales of previously owned homes in January fell by 8.4% from December to an annualized rate of 3.91 million, marking a 4.4% decrease compared to January 2025, the slowest pace since December 2023 [2] - The decline in sales was most pronounced in the South and West regions of the U.S. [3] Affordability and Supply - The National Association of Realtors (NAR) reported that affordability conditions are improving, with the Housing Affordability Index indicating the most affordable housing since March 2022, driven by wage gains outpacing home price growth and lower mortgage rates [4] - Despite improvements in affordability, housing supply remains low, with 1.22 million homes for sale at the end of January, representing a 3.7-month supply, below the balanced market threshold of six months [4] Home Prices and Market Dynamics - Tighter supply has kept home prices positive, with the median home price in January at $396,800, a 0.9% increase year-over-year and the highest January price on record [5] - Homes are taking longer to sell, averaging 46 days in January compared to 41 days in January of the previous year [5] - The market is seeing stronger sales in the higher-end segment, particularly for homes priced over $1 million, while sales for homes priced below $250,000 have dropped significantly [6]