The Blubber

"A homebuilder client of ours chose to back out of a contract to purchase a vacant lot during their due diligence period," one industry professional explained. "They cited concerns over the uncertainty caused by tariffs, particularly regarding the cost of building materials. They’d rather wait and see how the situation develops before moving forward with a new construction project."

In addition to material costs, rising mortgage rates are deterring potential buyers. As of April 9, rates spiked to 6.95 percent—the highest level in six weeks, according to data from Redfin.

This jump in rates is being fueled by ongoing economic instability and the Federal Reserve signaling that interest rate cuts may not come as soon or as significantly as previously anticipated.

Currently, the median monthly mortgage payment has hit a record high of $2,813, and there’s a strong possibility that payments will climb even higher in the near future.

“The only thing predictable about mortgage rates and the housing market right now is their unpredictability,” said Chen Zhao, an economist at Redfin.

Downtown Tucson, Arizona, has also been identified as an area with a high likelihood of experiencing a housing market downturn.

Zhao added, “With shifting trade policies and mixed signals from the White House on tariffs, markets and interest rates have become volatile. That volatility is making people uneasy about their finances. Nobody can say for sure what’s coming next. Growing economic uncertainty and the increasing risk of recession could freeze the housing market.”

Recently, five metropolitan areas were identified as being at significant risk of a housing crash in 2025. Unsurprisingly, three of these markets are located in Florida, while two are in other Sun Belt states.

According to a recent analysis using data from January, Winter Haven, Tampa, and West Palm Beach in Florida are among the top five U.S. cities most likely to see home prices fall next year. Phoenix, Arizona ranks second, while Tucson comes in fourth. Each of these markets has over a 70 percent chance of experiencing price declines, according to the latest report from CoreLogic.

Florida's market struggles are being driven by a sharp drop in demand, along with a noticeable increase in residents looking to leave the state.