Associated Press, by Alex Veiga
LOS ANGELES (AP) – This spring home viewing season is becoming more advantageous for residential shoppers than in recent years, as long as they can afford to buy.
Home prices are rising more slowly. Mortgage fees continue to rise, but most are eased, and could be lower as the US economic outlook continues to bleak the widespread tariffs of the Trump administration, which rattled financial markets and snatched fears of the recession.
Most importantly, the number of homes on the market has increased significantly over the past year.
The inventory of homes for sale nationwide is still low by historical standards, but data from Realtor.com shows an aggressive list that includes all homes in the market except for final sales (active list) that has surged 28.5% since last month. In many metropolitan areas, including San Diego, Las Vegas, Atlanta and Washington, DC, the list jumped between 44% and 68%.
As homes were selling longer, prices began to drop in many markets. Median list prices fell from the previous year last month for most of the nation’s largest 50 metro areas, including a decline of more than 6% in Austin, Miami and Kansas City.
These trends should give more leverage when future home buyers negotiate with sellers this spring, but they won’t be a game changer for many aspiring homeowners paying prices from the market after a long-standing price surge.
“It’s a bit difficult to say it’s a buyer’s market, but I call it a much more balanced market than I did in the past few years. There, it was really a seller’s market.”
Ryan Vasco and his wife, Whitney, recently navigated both sides of the housing market equation with their travels from Oregon to Colorado.
In December, the couple sold a three-bedroom, one bathhouse in Portland for $505,000. It was $10,000 more than their list price than $10,000, but still outperformed the minimum $500,000 they wanted to get.
At the same time, the couple searched for a home in the Denver Metro area. This is one of the biggest markets for homes for sale this year. Active listings rose 67.3% in March of the previous year. As the listings jumped, the median list price fell 5.6% to $585,000.
Last month, Vaskos was on the market for at least three weeks in a four-bedroom, three-bathroom home in Littleton, Colorado, about 10 miles south of Denver.
“We’ve now become the first week of our contract. We found out we were pregnant in the second week and we made an offer in this House of Representatives in the third week,” said Vasko, 41, creative director at the advertising agency.
Price: $680,000, or $5,000, above the price. Still, the sellers agreed to cover the cost of lowering the couple’s 6.9% mortgage rate to 4.9% and 5.9% respectively in the first two years of the loan.
“It gives you some room for wiggling if necessary,” Vasko said, noting that he would ultimately want to refinance at a lower fixed rate.
Mixed Market
The U.S. housing market has been in a sales recession since 2022, when mortgage rates began to rise from lows during the pandemic era. Sales of previously occupied US homes fell to their lowest levels last year in nearly 30 years. Mitigating mortgage rates and increased housing in the market helped raise sales in February from the previous month compared to the previous year.
Last year, the higher the mortgage rate, the weaker the start of the spring home viewing season. Mortgage buyer Freddie Mac said the average 30-year mortgage rate fell to 6.6% this year, up from 7% in mid-January, but rose from around 6% in September to a two-year low of around 6%.
Another plus for buyers: low price. Median list prices fell in March from the previous year in 32/32 out of 50 metropolitan areas, including Kansas City, San Francisco, Miami and San Diego. Nationally, it was $424,900 last month, but it hasn’t changed for a year.
A market shift could give home shoppers more leverage when sellers ask buyers to abandon their home inspection. Sellers may also pay for closing costs, donate cash or make other concessions to make repairs, real estate agents say.
“Almost every buyer wants concessions unless they know they’re in multiple offers situations,” said Afton Hartman, a Denver redfin agent.
This situation is less common than it was a few years ago, but still exists.
Synagogue executive director Girado Hoffman knew his home had ended when he found the four-bedroom 2.5-bath house for sale in Escondido, 30 miles northeast of San Diego. He felt that the home listed at $1.079 billion by the property of the deceased owner was in “a terrible price range.”
Hoffman, 41, surpassed the house’s asking price in February by $13,000.
The rise in mortgage fees did not discourage Hoffman. He accepted a 7% fee in exchange for credit from the lender.
“My philosophy was to get into the whole thing, to get into things like these high interest rates that you can afford,” Hoffman said. “Hopefully, two years later they’ll come down and you can refinance. And that’s still my intention.”
Affordable prices and uncertainty remain hurdles
Despite some buyer-friendly trends, the housing market remains largely out of reach for many Americans, especially first-time buyers who are not making household capital profits to head to their new homes. Although home prices have declined, the decline is negligible against a 47% increase in prices over the past five years.
And even more is needed to bring the market back to a more buyer-seller balance while the household list goes up. Think of it as the market had 1.24 million unsold homes at the end of February. According to data from the National Association of Real Estate, this is an increase of 17% over a year ago, but is about 44% below the average of 2.21 million people dating back to 1999.
As of January, households that achieved a median US income of $79,223 must spend 47% to cover home payments at a median of $390,333. According to the Federal Reserve Bank of Atlanta, its revenue share is in line with the highest in records dating back to 2005. When the annual cost of homeownership exceeds 30% of median U.S. household income, the Agency for Housing and Urban Development is considered uncontrollable.
As mortgage fees accelerate in the coming months, home buyers will be able to buy more purchasing power.
Economic forecasts generally only hold the average 30-year mortgage rate at around 6.5% this year, but these forecasts may be outdated now.
Last week’s 10-year Treasury’s sharp downward movement in yields by 10 years points to a decline in mortgage rates as bond investors responded to a rapid escalation of the trade war between the US and nations around the world.
Yields on 10-year Treasury bonds, which banks use as guide to pricing household loans, fell to 4.01% on Friday.
Still, tariffs are generally inflation, and the Treasury yields for the decade tend to rise in response to higher inflation expectations. It can maintain mortgage interest rates where they are or fine-tune them higher.
“We’re committed to providing a great opportunity to help you,” said Lisa Sturtevant, Chief Economist at Bright MLS.
Original issue: April 7, 2025, 12:15pm EDT
