A Cold Housing Market In a Hot Economy

The Weekly Recap

Good morning and happy Friday! The Fed left rates unchanged but more Fed governors are dissenting, Q2 saw GDP grow a massive 3% as US consumer confidence increase in July, the US housing market saw its slowest spring selling season in 12 years as home price growth also slowed for the fourth consecutive month. NYC was on edge this week as a shooting took place in the heart of Midtown, Long Island’s North Fork is becoming the Hamptons 2.0, in all of its merciful glory the NYC Transit System will delay fare and toll hikes until January and surprise (!) your Celsius energy drink might actually be a mislabeled High Noon vodka seltzer.

If you missed last weeks newsletter on NYC Home Values: Will Prices Drop or Have They Stabilized, you can read that through the link.

A Cold Housing Market In a Hot Economy

As the Federal Reserve held interest rates steady for the fifth consecutive meeting, against the backdrop of stronger-than-expected Q2 GDP growth, the housing market endured one of its weakest spring selling seasons in over a decade. With tariffs and shifting trade policies creating short-term uncertainty and a ripple of market hesitation, it’s becoming clear that housing is struggling to keep pace with the broader economy’s momentum.

This disconnect highlights a market caught between economic resilience and buyer hesitation. While GDP growth and employment remain robust, elevated mortgage rates and affordability pressures have sidelined many potential buyers. Sellers are increasingly adjusting expectations with more price reductions and longer listing times, while investors are proceeding cautiously, waiting for either rate relief or a clearer signal of market stability. As borrowing costs have remained relatively unchanged the last few months and with consumer confidence rebounding, the housing sector may not continue to lag behind the broader economic expansion for long but for now, it creates the rare dynamic of a hot economy alongside a cooling real estate market.

In New York City, the market is more nuanced. Sales volume has softened compared to last spring, yet the city’s global appeal and diverse buyer base are keeping the market resilient. High-net-worth individuals from finance, tech, and international markets continue to view Manhattan real estate as a safe-haven asset, even as national trends point to hesitation as evidenced by contracts taking place in the above $4 million price range over the last several months.

For buyers, this market is offering a window of opportunity for those willing to go out and get it. More inventory, more negotiating power, and an increased likelihood of seller concessions the longer a unit has been on the market. For sellers, patience and realistic pricing strategies are important as when listings linger, buyers gain leverage. For investors, this current market is one of measured opportunity rather than runaway appreciation. It’s about smart, long-term positioning that will outperform quick flips.

If current trends continue, 2025 is shaping up to be a year of moderate price growth from a national perspective of 2-3%, and as mortgage rates remain steady, even with the prospect that they may drift lower later in the year, housing will remain soft in an economy that otherwise keeps running hot.

Market Performance

Here are how some other indexes and asset classes have performed as of this morning’s opening bell.

NYC Market Update

Here is a view of NYC market activity over the past week.

Mortgage Rate Update

The average 30-year fixed-rate mortgage continues to exist in the same narrow range for the fourth consecutive week with no change whatsoever. Continued economic growth alongside moderating house prices and rising inventory is good news for both buyers and sellers.

News You Can Use

• US Housing Market Posts Worst Spring Selling Season in 13 Years Bloomberg

• US Economy Grew At a 3% Rate in Q2, A Better than Expected Pace CNBC

• US Housing Market’s Price Growth Slows for Fourth Straight Month Bloomberg

• Fed Keeps Interest Rates Unchanged for Fifth Straight Meeting CNN

• Divided Fed Holds Key Interest Rate Steady CNBC

• US Consumer Confidence Rises on Outlook for Economy, Job Market Bloomberg

• Long Island’s North Fork Is Becoming Hamptons 2.0 NY Post

• Bill Banning Congress Stock Trading Makes Its Way to the Senate New York Times

• Trump Announces EU Trade Deal with 15% Tariffs CNBC

• NYC Shooting Has Security Experts Asking “What Else Can We Do?” Bloomberg

• NYC Transit System to Hike Fares on Subway, Buses in January Bloomberg

• High Noon Recalls Vodka Seltzers Mislabeled as Energy Drinks Bloomberg

The Deep Insight

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