‘Increasingly worse vibes’ hampering spring housing market
Though mortgage rates are ticking down and home price appreciation has dropped year-over-year, widespread economic uncertainty continues sapping demand.
Key points:
- The 30-year fixed-rate mortgage averaged 6.3% this week, down from 6.37% the week before and much lower than this time last year when rates hovered around 6.83%.
- After climbing for five consecutive weeks, the recent drop in rates hasn’t immediately inspired prospective homebuyers to action, with purchase applications still off from last year’s pace.
- Home touring activity also remains slow even as affordability appears to be improving in many markets.
Following a slow start to the spring homebuying season, housing market conditions modestly improved this week — in part due to hopes that the U.S.-Iran ceasefire agreement reached in early April could lead to an end in the war.
The 30-year fixed-rate mortgage averaged 6.3% this week, down a few ticks from 6.37% the week before, according to Freddie Mac. This week's reading is the lowest in about a month and is significantly lower than a year ago, when the 30-year rate hit 6.83%.
After dropping earlier this week, mortgage rates have been mostly flat over the past couple of days, according to Mortgage News Daily (MND), which uses a different set of metrics to gauge rates. MND estimated that the 30-year rate as of April 15 was 6.32%.
"At this point the average war update is not having a noticeable impact," MND Chief Operating Officer Matthew Graham wrote in an online post, adding that it "will take a material change in the status of the war and a clear response in energy prices to catch the bond market's attention."
Mortgage applications stay slow
Homebuyers also appear to be having muted reactions to developments in the war. Overall mortgage applications increased 1.8% for the week ending April 10, according to the Mortgage Bankers Association (MBA), though with the unadjusted purchase index down 3% year-over-year, the uptick was driven by refinance applications.
"Purchase activity remained subdued as potential homebuyers remained hesitant given the current economic uncertainty," said Joel Kan, MBA's vice president and deputy chief economist.
For now, the spring housing market is still a bit of a toss-up, according to Lisa Sturtevant, chief economist at Bright MLS. She expects mortgage rates to remain volatile as inflation stays elevated.
Fewer people venturing out to tour homes
The spring homebuying season has had an especially slow start, with Redfin estimating that pending sales fell 4.1% year-over-year for the four-week period ending April 12.
Home-touring activity is also sluggish: While there has been an 11% increase in people looking at homes compared to the beginning of the year, the uptick for the same period in 2025 was 40%, Redfin's report noted.
"The lack of response to lower mortgage rates coincides with the slowdown in the labor market over the same period and increasingly worse vibes among consumers," said Chen Zhao, who heads economics research at Redfin.
Improving affordability could help buyers
For those who are ready to buy, there are some silver linings. In addition to this week's decline in mortgage rates, home prices remain stagnant, with First American's March Home Price Index report estimating that home appreciation dropped 0.4% year-over-year following a 0.3% bump between February and March.
"Nationally, house prices remain modestly below where they were a year ago, continuing to ease affordability pressures for prospective buyers," said Mark Fleming, chief economist at First American. "Monthly price appreciation reached the strongest pace in nearly a year as the improved affordability and emerging demand for the spring home-buying season translates into renewed momentum and a firmer pricing environment."
But strong regional differences remain, Fleming noted. The Midwest and Northeast markets continue to have strong annual price appreciation, while many markets in the South and West remain below year-ago levels.