Market activity is increasing, but affordability remains questionable
March’s market activity showed some expected seasonal growth as we move into spring, but an imbalance still lingers between buyers and sellers.
30-year mortgage rates dropped from 6.76% to 6.65%, a slight enticement for buyers who are keeping a diligent eye on the market. Sellers looking to take early advantage of seasonal transitions boosted NWMLS’s active listings nearly 44% year-over-year from March 2024.
“Easing of mortgage rates into spring home buying season has helped bring some home buyers off the sidelines,” said Selma Hepp, chief economist at Cotality (formerly CoreLogic).
Still, sellers and buyers alike will have to contend with continuing rising prices impacting the market. The median price for residential homes and condominiums rose 3.2% from $630,000 in February 2025 to $649,999 in March 2025.
“Rising median house prices continue to exacerbate affordability issues,” said Steven Bourassa, director of the Washington Center for Real Estate Research (WCRER). “In the first quarter of the year, median sale prices increased by 9.5%, which would translate into nearly 44% if compounded over the course of a year.”
Hepp also foresees that “home buying activity [will remain] muted amid a lot of economic and policy uncertainty and fears of future job losses.”
Source: NWMLS
Early spring shows initial signs of market warm-up
It’s now been more than a week since mortgage rates ended the day higher than the previous day. And we haven’t recovered quite as much lost ground as 10yr Treasury yields, we’re getting pretty close to fully re-entering the narrow range that persisted before the April 2nd tariff announcement.
Depending on one’s worldview, tariffs could be a good or bad thing. Let’s just say they’re a thing that can be good in the right applications and that the initial roll-out of the tariff plan was too much of a good thing. The early April rate spike was due to fallout from that realization and the recovery has coincided with a more measured approach toward more sustainable trading relationships.
Of course there’s much left to be determined and solidified, but whereas the bond market (and thus, rates) was a bit panicked at first, the balance of official communications has afforded traders more confidence. In addition, most traders assume there will be a near-term economic toll to pay as trade relationships are re-worked, and when markets expect weaker economic data, it puts downward pressure on rates, all other things being equal.
Things aren’t exactly equal in this case. Inflation pushes rates higher and there is definitely some fear that tariffs will cause a surge in inflation–temporary or otherwise. As this push and pull between the economy and inflation is increasingly resolved in the objective data, rates will have a better sense of where they’ll settle out.
As for today specifically, it was a modest victory for rates. Much like yesterday, it didn’t change things enough for most borrowers to see a big difference from the previous day, but on average, things are moving in the right direction. NOTE: there’s never a guarantee that things will continue to move in any given direction. Tomorrow’s movement could have more to do with the morning’s economic data than anything.
(Source: Mortgage News Daily by Matthew Graham)
Breakouts! – Residential SOLD Average
Builder Confidence Levels Indicate Slow Start for Spring Housing Season
Growing economic uncertainty stemming from tariff concerns and elevated building material costs kept builder sentiment in negative territory in April, despite a modest bump in confidence likely due to a slight retreat in mortgage interest rates in recent weeks.
Builder confidence in the market for newly built single-family homes was 40 in April, edging up one point from March, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today.
When asked about the impact of tariffs on their business, 60% of builders reported their suppliers have already increased or announced increases of material prices due to tariffs. -Elizabeth Thompson
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