Real Estate in Flux: How Stocks, Tariffs, and Inventory Are Reshaping the 2025 Housing Market
The housing market isn’t just influenced by interest rates and home prices—it’s increasingly affected by everything from the stock market to international tariffs. Real estate expert Ken Kaplan recently broke down how these interconnected factors are shaping affordability and buyer behavior in today’s environment. According to Kaplan, the stock market’s volatility is causing ripple effects across real estate. When stock prices drop, potential homebuyers feel less confident about pulling funds from their investment accounts for down payments or retirement savings. That hesitation slows real estate demand.
On the flip side, when the stock market seems too risky, some investors pivot to real estate to secure more predictable, long-term returns. At the same time, activity in the bond market is nudging mortgage rates slightly lower, potentially offering buyers a bit of relief. But interest rates aren’t the only thing shifting. Inventory is rising.
In San Diego alone, available homes have climbed to about 5,500—the highest level in four years. More inventory means buyers finally have options, and sellers face real competition. The days of 20-offer bidding wars are largely behind us. Homes are staying on the market longer, and price reductions are becoming more common. Kaplan emphasized the need for buyers and sellers alike to do their homework. In today’s market, understanding trends, neighborhood comps, and market dynamics is essential to avoid overpaying or underpricing. Tariffs are also starting to influence the housing landscape. As the cost of imported materials like lumber increases, so does the cost to build new homes. Kaplan laid out two opposing views: one side argues that tariffs could boost U.S. jobs and raise wages, potentially giving consumers more buying power. The other warns that higher construction costs will make homes less affordable. Right now, it’s unclear which side will win out, but the impact of tariffs on housing is something to watch closely.
The bigger issue Kaplan sees?
It’s not a housing shortage—it’s an affordability shortage. There may be more homes on the market, but if average Americans can’t afford to buy or rent them, the inventory boost won’t solve the real problem. For now, the best thing consumers can do is stay informed. Whether you’re buying, selling, or renting, knowledge is power. Kaplan advises sellers to analyze their local market and competitors to price realistically. Buyers and renters should resist emotional decisions and take time to evaluate their options carefully. In a market this complex, understanding the forces at play—from Wall Street to Washington—can make the difference between a smart move and a costly mistake.
