The Winners And Losers Of The Bifurcated Housing Market

Jun. 21, 2025 2:35 AM ET, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
(3min)

Summary

  • As the run-up in post-pandemic home prices slows, bifurcations in U.S. real estate present both risks and opportunities for investors.
  • A counterintuitive dynamic that could exacerbate matters for U.S. housing, at least in some regions, is a decline in interest rates.
  • A lower-rate environment, however, would favor commercial real estate (CRE) valuations.

Overhead Drone Shot of Residential Streets

halbergman

By Rich Hill, Global Head of Real Estate Research & Strategy

The ramifications of normalization in the U.S. housing market to pre-pandemic levels, at least in some regions, are substantial to investors. Though elevated interest rates, dampened affordability, and policy uncertainty remain concerns, there are

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The Principal Financial Group (The Principal®) is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $519.3 billion in assets under management1 and serves some 19.7 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com. Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Co. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Princor Financial Services Corp., 800/247-1737, Member SIPC and/or independent broker/dealers. Principal National, Principal Life, Principal Funds Distributor, Inc. and Princor® are members of the Principal Financial Group®, Des Moines, IA 50392. Investing involves market risk, including possible loss of principal.

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