Since Donald Trump returned to the White House, dramatic market swings have left many potential homebuyers feeling uneasy.

Even with tempting housing deals in some areas, the uncertainty is giving buyers pause.

Wall Streets Wild Ride and Main Street Jitters

Its been a bumpy ride for the stock market.

Wall Street

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When the market lurches up and down, consumer confidence can take a hit.

People feel less wealthy and more uncertain about the economys future.

Recent surveys and sentiment indexes bear this out.

stock market

This was the first year-over-year drop in housing sentiment since 2023.

Only about 24% of consumers in that survey said it was a good time to buy a home.

Its important to note that this dip in confidence is happening even while the job market is relatively solid.

First-Time Buyers

But the current mood shows that financial volatility can spook people even if theyre employed.

Why a Bumpy Stock Market Worries Homebuyers

Why do stock market swings matter to homebuyers?

For one, a lot of Americans have money in stocks either directly or in retirement funds.

houses as investors

In 2022, nearly 69% of U.S. homeowners had stock market investments.

Even among renters, about 37% owned stocks in some form.

This means when stocks drop, many peoplesee their personal wealth drop.

retirees

Homebuyers often rely on stock funds for big purchases.

The results highlight a key link between stocks and homebuying.

These findings illustrate howdeeply intertwinedthe stock market and housing market can be for individual finances.

map of America

But when stocks are plunging or fluctuating wildly, it throws a wrench into those plans.

This shortfall can delay or derail their home purchase.

Confidence Factor

Beyond dollars and cents, theres the confidence factor.

stock market

A volatile stock market often signals economic uncertainty.

Even if someones job is secure, they might worry:Will the economy get worse?

When those investments swing wildly, it can directly alter their homebuying timeline.

real estate professionals

That could wipe out a years worth of savings progress overnight.

Data from Zillows March 2025 market report underscores the cautious stance of first-timers.

These buyers typically have more experience and resources, but they arenotimmune to stock market volatility either.

Real Estate as a Safe Haven?

Some investors actually prefer real estate when stocks are shaky.

However, theres a flip side.

On the other hand, their confidence to make a leap can be shaken by financial uncertainty.

That indicates sellers overshot and had to adjust to meet what buyers were willing to pay.

Regional Shifts in Investor Activity

Regionally, investor activity has shifted too.

Now, those same markets are among the first to see year-over-year price declines as things cool off.

Inventory in several Sun Belt states (Arizona, Texas, Florida, etc.)

has climbed above pre-pandemic levels, and with more supply, prices have softened a bit.

warmer climates), or unlock equity for their golden years.

However, they too have been impacted by stock market volatility and economic uncertainty.

Recent data indicates that retirees are moving less than they used to.

Between 2023 and 2024, moving activity among retirees dropped by nearly 24%.

Why the big drop?

Now layer on the recent stock market turmoil.

Its also worth mentioning that downsizers who planned to sell may delay listing their homes in a volatile market.

Real estate is local, as the saying goes.

These modest declines suggest that buyers in those markets have gained some leverage likely because inventory has risen significantly.

Why are these areas more affected?

Much of the Northeast and Midwest fall into this category.

In early 2025, home prices were still rising slightly year-over-year in many Northeastern metros and Midwestern cities.

These areas didnt see a huge pandemic price explosion, so they dont have a big bubble to deflate.

Inventory in these regions remains relatively tight, which props up home values.

Its clear that caution is the prevailing mood.

As long as the stock market remains volatile and economic news is mixed, many buyers will remain hesitant.

The spring 2025 home-shopping season normally the busiest time of year has been unusually slow.

Buyers are negotiating harder, and more sellers are cutting prices to make deals happen.

This trend could persist throughout 2025 if uncertainty lingers.

If the economy does slow, rates often ease as inflation pressures cool.

Many forecasts predict a modest decline in mortgage rates by late 2025.

Already, we saw a brief dip in April 2025 when volatility spiked.

Lower rates improve affordability, which can bring back some buyer confidence.

A lot of would-be buyers are basically waiting for a better rate to pull the trigger.

This is actually healthy in the long run, giving incomes a chance to catch up.

This proves that attitudescanturn around in a matter of months.

In the meantime, real estate professionals are advising clients to stay grounded and focus on fundamentals.

So once confidence returns, the housing market has a solid foundation to bounce back on.

The prudent approach for buyers is to keep an eye on both markets but not be driven by fear.