First‑time buyers dominate U.S. market as inventory squeezes and rates hover
According to the National Association of Realtors’ January 2025 profile, first‑time homebuyers accounted for 33 % of all closed transactions in the United States – the highest share since the pandemic‑driven boom of 2020. The rise comes despite the 30‑year fixed mortgage rate hovering around 6.2 % after a modest uptick last week, as reported by Reuters. Higher borrowing costs have throttled overall demand, but the cohort that lacks equity and relies on savings for a down‑payment is still motivated to lock in a home before rates climb further.
Realtor.com’s November 2025 housing‑market report shows active listings up 12.6 % year‑over‑year, yet still 11.7 % below the pre‑pandemic norm. The simultaneous tightening of supply and modest price corrections – the national median list price slipped 0.4 % to $415,000 – have forced many buyers to look beyond traditional metros. Analyst commentary at Bloomberg notes that “the market is fragmenting; price‑sensitive buyers are gravitating toward secondary‑city ‘refuge markets’ where price‑per‑square‑foot gains remain modest.”
New‑Zealand’s property correction deepens, raising concerns for 2026
The New Zealand Herald reported a 31.3 % decline in residential values from the October 2021 peak, a figure corroborated by Statistics New Zealand’s house‑price index, which posted a 31 % year‑over‑year drop in the fourth quarter of 2025. The Reserve Bank of New Zealand’s official cash‑rate sits at 5.5 %, its highest level in a decade, compressing mortgage affordability and prompting a sharp contraction in buyer activity.
Interest.co.nz warned that “the growing overhang of unsold properties – estimated at 120,000 units across the country – will keep downward pressure on prices into 2026.” The surplus stems largely from a wave of new‑build projects launched during the 2022‑2023 price surge, many of which remain unfinished or on the market at discount. Industry analysts expect the National Housing Supply Committee’s upcoming policy reforms, including incentives for demolition of vacant units, to modestly ease the imbalance.
Where buyers migrated in November: a cross‑border view
Radio New Zealand traced the November shift in buyer geography, noting a surge in purchases outside the Auckland‑Wellington corridor toward regional centres such as Hamilton, Tauranga and Invercargill. The trend mirrors the United States, where RNZ‑sourced data showed a 15 % rise in transactions in “outer‑suburban” zip codes compared with core‑city areas.
U.S. data from the Federal Housing Finance Agency (FHFA) confirm that in November 2025, home sales in the Midwest and Mountain West grew at 4.2 % and 3.8 % annual rates respectively, while the Northeast lagged with a 1.9 % decline. The movement is driven by remote‑work flexibility and the lure of lower cost‑of‑living locales, a pattern also highlighted in a Fortune piece on the “new era” of housing affordability.
2025 winners and losers: market performance by metro
OneRoof’s year‑end analysis identified eight U.S. metros that posted double‑digit price gains in 2025, notably Cleveland (+6 %), Grand Rapids (+5 %) and Milwaukee (+5 %). Conversely, high‑cost coastal markets such as San Francisco (‑5.6 %) and New York (‑2.3 %) recorded price declines, while Austin suffered a 10 % year‑over‑year dip, reflecting oversupply and the lingering impact of rapid price appreciation in earlier years.
Realtor.com’s November data reinforce this split: the “refuge markets” of the Midwest and South saw modest median‑price growth (e.g., St. Louis +0.2 %) while the West and Northeast posted declines ranging from ‑1.5 % to ‑3.6 %. Price‑cut activity remained elevated, with 18 % of listings nationally posted a reduction, up from 16 % a year earlier.
Implications for investors and corporate strategy
For real‑estate investment trusts (REITs) and construction firms, the diverging regional dynamics suggest a strategic pivot toward “affordable‑growth” markets. Data from S&P Global REIT Index shows that REITs with exposure to secondary markets outperformed their peers by 1.8 % in Q4 202, driven by higher occupancy rates and tighter rent growth in those areas.
Mortgage lenders are also adjusting product mixes. Freddie Mac’s latest weekly survey indicates a 14 % rise in refinance applications over the past month, as borrowers attempt to lock in rates before a potential Fed tightening cycle in 2026.
Outlook for 2026
Economists at the IMF forecast that global real‑estate price growth will average 1.4 % in 2026, down from 3.2 % in 2025, as higher borrowing costs and tighter fiscal policies curtail speculative activity. In the United States, the Consensus Forecast for the 30‑year mortgage rate is 6.5 % for the first quarter of 2026, implying that affordability will remain stretched for first‑time buyers.
In New Zealand, the housing minister has pledged to accelerate the demolition of vacant units and to streamline planning approvals for mixed‑use developments, targeting a 5 % reduction in the unsold‑property overhang by the end of 2026.
Investors should monitor inventory trends in the Midwest and Mountain West, as these regions are likely to sustain price appreciation while offering relatively stable yields. For corporate real‑estate portfolios, reallocating assets toward markets with modest price growth and robust rental demand may mitigate the downside risk posed by a potential rate hike cycle.
more on property‑market dynamics in the Globally Pulse Business section.
