BiggerPockets Daily GDP Shrinks For First Time in Three Years
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Apr 30, 2025 The U.S. economy has contracted for the first time in three years, sparking recession fears. Discussing the impact of new tariffs, the podcast reveals how they distorted trade data and affect mortgage rates. Despite stable interest rates, mortgage applications are slowing down. The analysis highlights the current housing market dynamics as buyer hesitance grows, with seller concessions becoming essential. Listeners will gain insights into the shifting landscape for both homebuyers and investors.
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GDP Contracts Due to Imports
- The U.S. GDP contracted by 0.3% annualized in Q1 2025, first negative growth since early 2022.
- This contraction was mainly due to a massive surge in imports reducing the GDP headline number significantly.
Government Spending Inflated GDP
- Government spending inflated GDP growth from 2020 to 2022, masking real economic strength.
- Comparing GDP and gross national income during this period shows an unhealthy spread indicative of inflated figures.
Import Surge From Tariff Anticipation
- Companies front-loaded imports to avoid upcoming high tariffs proposed by President Trump's administration.
- This strategic import surge is why imports spiked, heavily affecting GDP calculations in Q1 2025.