The American housing market shows signs of weakness in what is normally the cutting -edge sales season, as potential buyers are due to the economic uncertainty linked to higher prices and mortgage rates.
The houses have been sitting on the market for the longest period since 2019, according to the real estate broker Redfin.
The existing houses, which constitute most of the American real estate market, have been sold to the slowest rate of all March since 2009, said the National Association of Realtors this month. Sales of new houses have accelerated slightly, but not enough to compensate for this slowdown.
Requests for a mortgage to buy a house fell for three consecutive weeks during the period ending on April 25, the Deathgage Bankers Association said.
“The lukewarm housing market indicates a general feeling of caution among consumers,” said Selma Hepp, chief economist of the Cotality real estate consultant. “With 70% of American GDP depending on consumption expenses, this could quickly lead to a recession.”
High mortgage rates have limited the US housing market since the federal reserve increased borrowing costs in 2022. Many mortgages in the United States cannot be transported in new houses, so that owners who have locked up at a lower rate are often not ready or unable to move.
Mortgage rates dropped at the start of the year, but went back again after the announcement of Trump's so-called “Liberation Day” in early April.
The average mortgage rate of 30 years was 6.76% during the week ending on May 1, according to Freddie Mac. This, in addition to diving consumer confidence and the increase in fears of unemployment, decreased hopes for relief in the critical sales season of this year.
Buyers are “frozen in place” because they find it difficult to understand how new commercial directors in the administration will affect mortgage rates and housing costs, said Rick Palacios JR, research director at John Burns Research & Consulting.
The volatility of the financial markets has also retained those who hope to rely on stock market investments for payments, said Charlie Dougherty, principal economist at Wells Fargo.
Dr. Horton, the largest manufacturer of houses in the United States, reduced his prospects in April after having lacked expectations of profits in the first quarter. Sales have also dropped from one year on the other at Pultegroup, another important manufacturer of houses, because it faced a demand “more volatile and less predictable,” said Managing Director Ryan Marshall.
Housing costs were a key problem for both parties on the campaign track, but since January, it has largely taken a rear seat for Trump's trade and immigration policies, which, according to economists, could worsen the challenges of long -standing affordability.
Médian mortgage payment has reached a record summit of $ 2,870 for the houses under contract within four weeks until April 27, said Redfin on Thursday.
Manufacturers believe that new Trump's commercial levies will increase the costs of materials on average by $ 10,900 per home, which could take place at prices, according to a survey by the National Association of Homebuilders.
The renovations could also become more expensive under the new prices, hitting entry -level house buyers particularly harshly, according to HEPP.
In a static market, many house manufacturers have used more expenses for special offers, including design credits and interest rate buyouts, to unload their stock.
The costs of incentives were equivalent to 12.9% of the revenues of the house manufacturer Lennar in the first quarter of 2025, the most since 2009. Dr. Horton, similarly, should offer “high” incentives throughout the spring season, said Director General Paul Romanowski.
“We see more manufacturers having to reduce prices and offer incentives just to move the houses – and this should be the simplest period of the year to sell a house,” said Ali Wolf, chief economist of the Zonda construction data company.
Jay Nix, a real estate agent in Washington DC, said that house buyers were “more unstable” than he had seen him for more than a decade to help people buy and sell houses. He said the many employees of the district government were particularly “tight” while the Trump administration continues to dismiss federal employees.
“I had customers who have paused on their research due to economic fears and I had people who have lost federal jobs and who were forced to stop looking,” said Nix. “I also have customers who hold possible offers in the event of a slowdown later this year.”
Nevertheless, there are money liners for all buyers still able to make an offer, because the houses are seated on the market longer.
Kay Houghton, a real estate agent based in northern Virginia, said that many of his clients had stopped their searches at home “due to uncertainty with their government jobs”.
Others, however, saw “the opportunity to get into a house with less competition”.
