Has Homebuyer Power Shifted? 5 Key Market Trends

Good morning, Dwellers! Welcome to another edition of Dwellings Digest, a realtor and investor driven newsletter simplifying real estate, exploring the economy-stock-real estate link, adding a fun twist with niche topics and more. Enjoy!

In today’s edition - 

• Austin listings explode (+6% price drop), yet sales slow—nearly half of sellers cutting prices.

• First-time buyer share plunged to 24%, risking broader economic drag.

• Insurance costs up 20–28%, intensifying mortgage stress in disaster-prone regions.

Quote of the day - A home is more than an address—it's the story of who you are

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🏛️ Economic & Market Sentiment

• Multifamily REIT bounce: Tariffs will slow new construction, lifting value of existing rentals—Blackstone’s $10B acquisition is an example.

• Apartment REITs setup: JPMorgan flags brokerages and net-lease REITs for near-term growth; expect residential REITs to shine in 2026 Business Insider

• Homebuilder pressures: While Lennar beat forecasts, warned margins remain under stress—indicating cautious investor sentiment.

• Insurance risk squeeze: Reinsurer woes and higher rates feed cost pressures on homeowners—not REIT-linked yet but a financial drag.

• Trade-war tariff impact: 25% auto and construction tariffs heading into effect; bond yields and mortgage costs may rise, dampening housing and mortgage-refi stocks.

• Mortgage rate dynamics: Bond market volatility (10-year yield turbulence in April) affects mortgage rates—impacts housing demand and mortgage-REITs

🎢 Impact on Real Estate

Cooling Demand in Austin Housing Market

• New listings surged, while median home prices dropped over 6% year-over-year—Austin led the nation in new supply growth from May 2024 to May 2025 MySanantonio

• Absorption rate at 0.216, less than half the national average—only 22% of listed homes sold monthly, signaling weakening buyer interest MySanantonio

• Nearly 45% of listings cut prices, showing sellers must adjust to attract buyers MySanantonio

🎙️ RE Spotlight

First-Time Buyers Plummet—Risking Market Slowdown

• The share of first-time buyers dropped from 50% in 2010 to only 24% in 2024 Business Insider

• 75% of Gen Z say renting offers more flexibility, while 83% view it as more financially savvy than buying Business Insider

• Experts warn this could slow housing-related economic sectors like construction, sales, and wealth building Business Insider

Rising Insurance Costs Fuel Mortgage Stress

• Home insurance premiums increased 20% from 2022 to 2024, with another 8% rise projected in 2025 MarketWatch

• In high-risk regions, homeowners saw premiums jump from $7,000 to $12,000 within a year MarketWatch

• Insurance cost spikes are triggering localized mortgage delinquencies, threatening housing affordability MarketWatch

🏕️ Niche-RE

More Supply = Buyer Leverage Nationwide

• U.S. listings rose 31.5% year-over-year in May, marking the 19th consecutive month of growth Realtor

• The typical home stayed on the market 51 days—about 6 days longer than last year Realtor

• Price cuts hit 21% of listings in the South and West, double the rate in the Northeast

Luxury Market Resilient with Cash Buyers

• In Manhattan, 69% of transactions were all-cash in Q2 2025 New York Post

• Luxury sales (top 10%) are up 18% year-over-year, with median prices at $6.52 million New York Post

• Inventory in the luxury segment dropped 21%, highlighting strong demand among wealthy investors Newsweek

🖼️ Chart-Tastic

And…that's a wrap on this edition!

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