Hi Friends! 

This week brought a wave of important economic updates that have direct implications for the housing market. From signs of stagflation in the manufacturing sector to early signs of buyer demand recovery, the landscape continues to shift. Here's a breakdown of the key events—and why sellers, buyers, and homeowners alike should be paying attention.

Manufacturing Slips: A Warning Sign?

The S&P Global Flash Manufacturing PMI dipped below 50 in March, signaling contraction in the sector. After showing some signs of life in late 2024, manufacturing momentum has reversed sharply. According to the report, growth in new orders nearly stalled, while input cost inflation surged to a 31-month high—largely driven by newly imposed tariffs.

This development raises the specter of stagflation, a rare economic condition characterized by stagnant growth, rising unemployment, and elevated inflation. It's a tough combination—typically, when inflation rises, unemployment falls. But in stagflation, prices climb while the economy stalls and job opportunities shrink.

What Stagflation Means for Homeowners and Buyers

• Homeowners with fixed-rate mortgages may be insulated from rising interest rates, but the overall cost of living—groceries, utilities, home maintenance—goes up. In a sluggish economy, their home’s value may not appreciate meaningfully, and if they choose to sell, fewer buyers may be able to afford it.

• Homebuyers feel the impact more acutely. Inflation erodes purchasing power, while interest rate hikes drive up mortgage costs. As wages stagnate, saving for a down payment becomes more difficult. If stagflation persists, the market may slow further—but for cash buyers, it could present rare opportunities.

Stagflation is not a certainty yet. Historically, it defined the 1970s, triggered by oil shocks and policy mistakes. While current economic pressures are concerning, we'd need to see faster-rising unemployment to officially call it.

The Inflation Disconnect: What Truflation vs. Surveys Tell Us

While traditional measures like the Consumer Price Index (CPI) are released monthly with a lag, Truflation offers a real-time inflation reading by pulling data from 30+ commercial and public sources.

As of early March 2025, Truflation reported inflation near 1.3%, suggesting actual price growth may be slowing. Meanwhile, the University of Michigan's consumer survey showed inflation expectations rising to 4.9%—highlighting a gap between perception and reality.

Why the disconnect? The Michigan survey reflects what people think will happen based on news, political shifts, or personal sentiment—not necessarily actual data. Truflation, on the other hand, shows what's currently happening in the economy.

Near-Record Housing Costs Holding Back Sales

Based on Redfin data through March 16, 2025, buyer interest is rising, but affordability remains a significant barrier. Here's the latest snapshot:

• The typical monthly mortgage payment is $2,793—just $6 below the all-time high.
• Pending home sales are down 5.2% year-over-year.
• However, home tours are up 35% year-to-date.
• Mortgage applications are at a six-week high.
• Redfin’s Demand Index reached its highest point since December.

This could indicate stronger buyer activity ahead—if mortgage rates ease. Rate relief is likely only if inflation softens or the economy shows clearer signs of slowing.

On the supply side:

• New listings are up 5.5%, the biggest jump in six weeks.
• Median days on market have increased to 50.
• Fewer homes are selling above list price.

Redfin agents report that conditions feel more like a buyer’s market. Buyers are taking their time, negotiating more, and responding best to well-priced, move-in-ready homes. For sellers, presentation and pricing are critical.

Personal Perspective: Most Homeowners Think About Selling for 7+ Months

Selling a home is rarely an overnight decision. Most homeowners take more than seven months to seriously consider selling. If you’re in that space—thinking, wondering, planning—here’s how I can support you whenever you’re ready:

• A personalized home value report that goes beyond any online estimate
• Trusted local contractor referrals if you're thinking of making updates
• Professional staging and strategy to maximize your sale price
• And yes—emotional support, because selling a home is personal

If you’re unsure where to start or just want to ask a few questions, I’m here for that too.

Key Economic Reports to Watch This Week

Consumer Confidence – Tuesday

This index offers insight into how Americans feel about their finances and the broader economy. If confidence continues to fall, it could signal growing concerns about inflation, job stability, and borrowing costs—factors that impact first-time homebuyer activity especially.

February New Home Sales – Tuesday

This data shows how buyers are responding to current market conditions. With limited resale inventory, builders are offering incentives to offset high interest rates. In markets with active new construction, this could become an attractive option.

Atlanta Fed GDPNow Update – Wednesday

This real-time Q1 GDP tracker has shown unusually strong estimates lately. If growth remains elevated, the Fed may feel less pressure to cut rates, which would delay relief for homebuyers.

Final Q4 2024 GDP – Thursday

This revision can signal how much momentum the economy carried into 2025. A weaker number would support the case for the Fed to ease monetary policy.

February PCE Inflation – Friday

Arguably the most important report of the week, the PCE (Personal Consumption Expenditures) index is the Fed’s preferred inflation gauge. Current expectations:

• PCE YoY: 2.5%
• Core PCE (excludes food/energy) YoY: 2.7%
• Some forecasts suggest a slightly lower print (2.3%) that could help markets rally and put downward pressure on rates. Others expect a rise, which could push bond yields higher.

There is no clear consensus, but markets are watching closely. If you're under contract, this is a good time to consider locking in your mortgage rate.

 Looking Ahead: 10 Days Until Proposed Tariffs

We’re just ten days away from the potential rollout of former President Trump’s reciprocal tariffs plan. If enacted, these tariffs would match trade barriers set by other countries and could increase the price of imported goods.

Housing Impact

Higher costs on imported materials—like lumber, appliances, and construction supplies—could raise the cost of building and renovating homes. For context, increased lumber prices from Canada alone can add up to $9,000 to the cost of building a new home. This would further strain affordability, especially for first-time and entry-level buyers.

Final Thoughts

This week’s economic signals are sending a mixed message. Manufacturing is weakening, inflation remains uncertain, and buyer interest is rising—but cautiously. Sellers should be strategic, informed, and prepared to meet the market with competitive pricing and strong presentation.

If you’re considering selling—or just want to better understand where your home fits into the current market—now’s a great time to start the conversation.

Let’s connect.