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How China could crush the US housing market

How China could crush the US housing market

Ranked: Top 10 Countries with the Most High Net Worth Individuals and 12 more real estate insights

Vidit Saxena
April 16, 2025

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Latest Rates

Loan Type	Rate	Daily Change	Wkly Change	52-Wk Low/High
30 Yr. Fixed	6.88%	-0.10%	+0.03%	6.11/7.52
15 Yr. Fixed	6.29%	-0.16%	+0.05%	5.54/6.91
30 Yr. FHA	6.37%	-0.07%	+0.14%	5.65/7.00
30 Yr. Jumbo	7.05%	-0.05%	+0.15%	6.37/7.68
7/6 SOFR ARM	6.45%	-0.10%	+0.12%	5.95/7.55
30 Yr. VA	6.38%	-0.07%	+0.13%	5.66/7.03

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Macro Trends

Why are US long-term interest rates moving higher? link

Long-term interest rates are rising even as the stock market declines, which breaks from typical historical patterns. This unusual move suggests deeper structural forces at play beyond simple market sentiment.
Three likely reasons behind the increase are foreign selling of U.S. Treasuries due to stronger foreign currencies, elevated hedging activity from large asset managers, and unwinding of the $1 trillion basis trade by levered hedge funds.
The current market shows signs of stress, with the VIX around 50 and large rate dislocations pointing to a complex mix of global and domestic financial pressure. These dynamics make long rates harder to predict in the near term.

Real Estate Trends

Here’s how China could crush the U.S. housing market link

Foreign countries hold $1.32 trillion in U.S. mortgage-backed securities (MBS), with China already cutting its stake by 20% last year. If China and others accelerate MBS sales, it could sharply raise mortgage rates and rattle the housing market.
Japan, Taiwan, and Canada are also top MBS holders, and analysts warn that coordinated sell-offs would widen mortgage spreads. That would make home loans more expensive just as consumer confidence and savings are already weakening.
The Fed is also reducing its MBS holdings, adding more pressure to the market. Combined with rising Treasury yields and trade tensions, the spring housing market faces serious risk of further slowdown.

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U.S. foreclosure activity increases quarterly in Q1 2025 link

Foreclosure filings hit 93,953 properties in Q1 2025, up 11% from the previous quarter but down 2% year-over-year. Foreclosure starts rose 14% from last quarter, with Chicago, New York, and Houston seeing the highest numbers.
Delaware had the highest foreclosure rate at one in every 761 housing units, followed by Illinois and Nevada. Cities like Columbia, SC and Lakeland, FL also ranked among the highest for foreclosure rates.
Lenders repossessed 9,691 homes in Q1 2025, an 8% quarterly increase. The average foreclosure timeline fell to 671 days, down 12% from the previous quarter, with the fastest processes seen in New Hampshire and Texas.

Something I found Interesting

Florida still most desired destination for out-of-state buyers link

Florida led the nation in 2024 with the most out-of-state interest, topping the list for buyers from nine states. Texas and Washington followed, all three states benefiting from no state income tax and a mix of urban and rural options.
South Carolina had the highest inbound-outbound ratio at 2.55, meaning 255 people looked to move in for every 100 residents looking to leave. Maine and Delaware also ranked high in relative demand from out-of-staters.
California saw the least inbound interest, with only 30 out-of-state searchers for every 100 Californians looking to leave. The state’s $3,399 average monthly mortgage payment and 34% income-to-housing cost ratio were key turn-offs.

Location Specific

Tech deals lead San Francisco office leasing to 10-year high link / link

San Francisco office leasing hit 3.4 million square feet in Q1 2025, the highest quarterly total in a decade. The surge is driven by large tech deals, signaling a major rebound in demand.
The total availability rate dropped to 35.6%, down 100 basis points from the previous quarter. This marks a rare tightening in a market that has struggled with high vacancy since the pandemic.
The data points to a strengthening office recovery in San Francisco, especially in tech-heavy corridors. Demand is concentrating in high-quality, centrally located properties.

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Pro Member Only Content Below

Most of the insights below stem from extra research and include content from paid sources and special reports.

High-end housing market trends and outlook