April 25 2025

Reef Daily

Reef Daily | April 25 2025

Latest Market Data (April 25, 2025)

Existing home sales fell 5.9% in March to a seasonally adjusted annual rate of 4.02 million, the largest monthly decline since November 2022
Year-over-year, sales decreased by 2.4% compared to March 2024
The median existing-home sale price rose 2.7% from March 2024 to $403,700, marking the 21st consecutive month of year-over-year price increases
Housing inventory jumped 8.1% from February to 1.33 million units at the end of March, representing a 4.0-month supply at the current sales pace
Inventory is up 19.8% from one year ago compared to March 2024
Lawrence Yun, NAR Chief Economist, cited "affordability challenges associated with high mortgage rates" as the primary factor for sluggish activity

Regional Sales Performance (March 2025)

Market Impact

Mortgage rates have increased slightly over the past week
Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, expects home sales to "flatline at best" due to the gap between current mortgage rates (nearly 7%) and rates on existing mortgages (averaged 4.3% in Q4)

Commercial Highlights

Apollo Commercial Real Estate Finance reported Q1 2025 results with net income of $0.16 per diluted share and distributable earnings of $0.24 per diluted share on April 24
Apollo deployed $650 million in capital during Q1 2025, with CEO Stuart Rothstein noting focus on "redeploying capital into newly originated loans"
Digital Realty Trust raised its annual core funds from operations forecast on April 24, now anticipating range of $7.10-$7.15 per share, up from previous $7.00-$7.10 projection
Digital Realty's shares rose 3.3% in extended trading following the announcement of strong data center demand

Inventory Trends

Total housing inventory registered 1.33 million units at the end of March, up 8.1% from February and 19.8% from one year ago
Unsold inventory sits at a 4.0-month supply at the current monthly sales pace, improved from 3.5 months in February and 3.2 months in March 2024
Properties typically remained on the market for 36 days in March, up from 33 days in March 2024, indicating slower absorption rates

CRE Market Sentiment

CRE Finance Council survey released April 24 shows optimism in commercial real estate financing dropped by 30.5% in Q1 2025, the second largest decline ever recorded
80% of respondents anticipate economic conditions to deteriorate over the next year, up from just 12% in Q4 2024
50% of those surveyed expect declining conditions specifically in the commercial real estate market
60% attributed their pessimistic outlook to trade policy risks and rising construction expenses linked to new tariffs
Despite market concerns, 80% of surveyed professionals expect CMBS issuance to either remain stable or experience only a slight downturn

Buyer Demographics

First-time buyers accounted for 32% of sales in March 2025
All-cash transactions represented 26% of sales in March, down from 28% a year earlier

West Region

The West was the only U.S. region to see a year-over-year increase in existing home sales, up 1.3% compared to March 2024
The median price in the West region was $621,200, up 2.6% from March 2024, continuing to maintain the highest median price across all regions

South Region

The median existing-home price in the South was $360,400 in March, representing a modest 0.6% increase year-over-year, the smallest regional price growth

This newsletter is for informational purposes only and should not be considered as financial advice.