What's happened
As of April 18, 2025, the US housing market is experiencing a significant slowdown, with homes selling at their slowest pace in six years. Increased inventory and cautious buyers are leading to fewer bidding wars and price reductions, while the UK market sees rising asking prices despite new stamp duty regulations.
What's behind the headline?
Market Dynamics
- The US housing market is currently facing a slowdown, with homes taking longer to sell and fewer buyers willing to engage in bidding wars.
- Increased inventory, with a 14.1% year-over-year rise in active listings, has shifted the balance of power from sellers to buyers, leading to a decline in competition.
- In the UK, despite a record average asking price of £377,182, the market is also showing signs of strain due to new stamp duty regulations and fluctuating mortgage rates.
Buyer Sentiment
- Buyers are exhibiting caution, influenced by economic uncertainty and high mortgage costs. In the US, only 27% of buyers paid above the listing price in March, the lowest since 2020.
- In the UK, the average mortgage payment is consuming around 25% of median household income, exceeding the recommended guideline of 30%.
Future Outlook
- Experts predict that if sellers do not adjust their price expectations, home sales may continue to decline. The market may see price cuts as buyers remain hesitant.
- The UK market may experience a similar trend, with potential buyers reassessing their options in light of new tax implications and economic conditions.
What the papers say
According to the New York Post, the US housing market is experiencing its slowest sales pace in six years, with increased inventory leading to reduced competition among buyers. Redfin's report highlights that homes are now taking an average of 47 days to go under contract, compared to less than 20 days in 2022. Meanwhile, Business Insider UK notes that the UK market has seen a significant increase in asking prices, reaching a record high, despite new stamp duty regulations that could deter buyers. The Independent reports that the average asking price in the UK has risen by £5,312 from March, indicating a resilient market despite economic pressures. However, both markets are facing challenges as buyers remain cautious amid rising costs and economic uncertainty.
How we got here
The housing market has been influenced by various factors, including rising mortgage rates, increased inventory, and changes in stamp duty regulations. These elements have contributed to a shift in buyer behavior and market dynamics, leading to a cooling off period after a post-pandemic surge.
Go deeper
- What factors are influencing the housing market?
- How are buyers reacting to the current market conditions?
- What predictions do experts have for future home prices?
Common question
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What’s Causing the Decline in UK House Prices?
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How Are Recent Tax Changes Affecting UK House Prices?
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What Are the Current Trends in Mortgage Rates and the Housing Market?
As mortgage rates hit a six-month low and UK house prices experience a notable decline, many potential homebuyers and investors are left wondering how these trends will impact their decisions. Understanding the factors behind these changes can help you navigate the current housing landscape effectively.
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What is Driving the Record High in UK House Prices?
In April 2025, UK house prices reached an all-time high, raising questions about the factors behind this surge. With new stamp duty regulations and fluctuating mortgage rates, many are left wondering how these changes impact the housing market and potential buyers. Below, we explore the key questions surrounding this topic.
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What are the current trends in the UK housing market?
As of April 2025, the UK housing market is undergoing significant changes, with rising prices and increasing inventory creating a complex landscape for buyers and sellers alike. Understanding these trends is crucial for anyone looking to navigate the market effectively.
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Why are UK house prices rising despite economic uncertainty?
As of April 2025, the UK housing market is witnessing a surprising trend: rising house prices amid economic challenges. This situation raises several questions for potential buyers and investors. What factors are driving these price increases? How do new regulations impact the market? Here, we explore the current landscape of the UK housing market and what it means for you.
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