In a stark and timely forecast, Michael Eisenga, CEO of First American Properties, warns that U.S. home prices may be headed for a multi-year decline, marking a pivotal shift in a market that has experienced years of elevated valuations.
What’s Behind His Outlook?
1. Rising Inventory Coupled with Softer Demand
Eisenga points to a significant buildup in housing supply—nearly 960,000 active listings as of April 2025, reflecting a 30.6% surge year-over-year. At the same time, pending sales have slipped by 3.2%, signaling fading buyer urgency. These conditions, he argues, reflect early signs of a broader housing correction already in motion.
2. Shrinking Price Gap Between New and Existing Homes
The traditional price premium that new homes command over existing ones—formerly around $64,000—has narrowed dramatically to just $14,600 as of Q1 2025. When factoring in non-obvious incentives such as rate buydowns or closing cost credits, that gap may effectively disappear, hinting at broader downward pressure on prices.
3. Record Drop in Homebuyer Demand
Eisenga emphasizes the severity of the slowdown—calling it “the biggest collapse of homebuyer demand in U.S. history.” Mortgage applications have plunged 63% from their pandemic peak and remain down about 52% from pre-pandemic levels, exacerbating the demand shortfall.
Economic Context and Broader Warnings
Michael Eisenga’s concern isn’t limited to the housing market. His broader economic outlook underscores:
- A weakening labor market, declining labor hours among nonsupervisory workers, and rising consumer credit stress—particularly in auto loan delinquencies.
- Indicators suggesting a potential economic slowdown or recession, which could further accelerate housing price declines.
Implications: What This Could Mean for Buyers and the Market
For Buyers:
- Increased negotiating power: Slower demand and growing inventory could translate into price reductions and seller concessions.
- More balanced market dynamics: Buyers may gain leverage as competition eases and builders lower prices.
For Sellers:
- Inventory pressures may force sellers to reconsider pricing strategies and accept concessions to attract buyers.
- Existing-home sellers face lagging reaction: While builders adjust quickly to market changes, homeowners may be slower to recognize shifting conditions.
For Investors & the Economy:
- A prolonged housing downturn could depress construction activity, weaken related industries, and further dampen broader economic growth.
- Regional discrepancies will be key: Some areas have already seen price drops of ~10%, while others may hold steady for longer.
Final Thoughts
Michael Eisenga’s projections of multi-year housing price declines rest on a foundation of elevated supply, evaporating demand, and broader economic vulnerabilities. His analysis suggests that meaningful market recalibration may finally be underway.
For prospective buyers, this environment could present opportunities—but patience and strategic timing may be critical. Sellers should be aware of evolving dynamics and consider flexibility in pricing. Investors and policymakers will need to remain attuned to regional variances and structural economic risks.
Please note: Any opinions discussed in this article belong solely to the author, Marissa Berends, and do not necessarily reflect the views of Capitol Lien.
About the Author
Marissa Berends is a Certified Abstractor and Industry Relations Coordinator at Capitol Lien, a nationwide due diligence and risk mitigation services provider. Since joining the company in September 2021, she has earned abstractor certifications in Minnesota, Nebraska, and North Dakota. She is pursuing her Wisconsin Title Examiner certification, which is expected to be completed in Fall 2025.
Marissa is involved with the following groups: Wisconsin Land Title Association’s (WLTA) Convention Committee & Young Title Professionals; Nebraska Land Title Association’s (NLTA) Convention Committee; Property Record Industry Association (PRIA) National Education Committee; Illinois Land Title Association’s (ILTA) Inclusion, Diversity, Equity & Acceptance (IDEA) Committee; and the National Association of Land Title Examiners and Abstractors (NALTEA).
About Capitol Lien
Capitol Lien empowers real estate and title professionals with trusted public record research and due diligence services nationwide. With 35 years of experience, Capitol Lien specializes in fast, accurate property and title searches, lien reports, and document retrieval that help title agents, underwriters, and legal teams operate their businesses with confidence. The Capitol Lien team takes the hassle out of title research with local experts and innovative tools that make it easier to mitigate risk, stay on schedule, and keep your closings moving smoothly.
Learn more at capitollien.com. Ready to simplify your title research? Send your next order to Capitol Lien and experience the difference trusted diligence makes. Stay in touch with Capitol Lien on LinkedIn for industry updates and information. Reach out! contact@capitollien.com or 800-845-4077.
Sources:
Yahoo Finance: U.S. Home Prices Poised for Multi-Year Decline, Says First American Properties CEO Michael Eisenga
GlobeNewswire: U.S. Housing Market Signals Broader Correction – Michael Eisenga, CEO of First American Properties
PR Newswire: Navigating the U.S. Housing Crisis: Michael Eisenga Provides Expert Insight on the Market’s Challenges
Globest: U.S. Economy Already in Recession, Warns Real Estate CEO
ReadySetLoan: Is a Housing Market Correction Underway? The Signs Are Hard to Ignore