Housing Market Freeze Hits Spring Buying Season

BETAThis is a BETA experience. opt-out hereLeadershipHousing Market Freeze Hits Spring Buying SeasonBuyers are priced out, sellers won’t budge and economic uncertainty is killing momentum in what should be the peak spring season. Now, Congress is trying to boost the U.S. housing supply.

ByDanielle Chemtob,

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Foot traffic to the $2.4 million home that Bay Area real estate agent Jennifer Branchini recently listed for sale in Pleasanton, CA, was unusually slow for the spring buying season.

A house she sold earlier in the year in the same upscale suburb had 140 groups tour in its first weekend. But by late April, just 25 to 30 groups toured the four-bedroom craftsman home over its first weekend on the market.

The housing market is at a standstill, with existing home sales in the normally busy month of April rising just 0.2%, as buying remains out of reach for most, thanks to record home prices and elevated mortgage rates. And the Iran war has dashed any hopes of a thaw in time for the crucial spring buying season—with volatile energy prices bringing uncertainty into an economy already on shaky footing.

Adding to that, especially among Branchini’s client base in the tech-heavy region, is uncertainty about the job market, with firms like Meta, Oracle, and Block shedding jobs to make way for AI investments.

“I think people are being more conservative …. looking but also just sitting in the sidelines,” she says. “But I think job security is top of mind.”

How We Got Here

Just a little over five years ago, the housing market looked dramatically different. Buyers bid up home prices to take advantage of historically low mortgage rates driven by pandemic-era rate cuts—the average 30-year rate bottomed out at 2.65% in January 2021.

But as inflation soared, the Federal Reserve embarked on a rate-tightening campaign, causing the average 30-year fixed mortgage rate to jump to nearly 8% in October 2023.

All the while, home prices climbed too, even as demand dipped, with the median sales price for existing homes reaching $417,700 in April—which was the 34th consecutive month of year-over-year price increases. More than half of homes were sitting on the market for at least 60 days in February, the highest share since 2019.

The laws of supply and demand would dictate that prices need to come down, but there’s just one problem: not enough supply. Homeowners locked into lower rates are reluctant to sell, and the U.S. has chronically underbuilt housing since the 2008 financial crisis. The housing shortage was estimated at around 4.7 million units as of mid-2025.

“Home sellers are not in a desperate situation,” says Lawrence Yun, chief economist at the National Association of Realtors. “So the inventory level is not growing to the extent that I thought it would grow.”

Hopes Dashed For The Great Thaw

The stalled market showed signs of life earlier this year. The average 30-year fixed mortgage rate dipped below 6% in late February, and many hoped that dropping below this psychological threshold would bring buyers off the sidelines. And indeed, home sales picked up, as affordability and inventory improved.

Plus, the “golden handcuffs” keeping sellers in their homes were starting to fade, as the share of outstanding mortgages above 6% has been higher than those below 3% since mid-2025, Realtor.com found.

But that boost was short-lived—the U.S. and Israel would launch their military campaign against Iran at the end of the month.

As oil prices spiked, the average 30-year-fixed rate rose, reaching around 6.46% in early April. But would-be buyers are still being squeezed by higher prices at the pump, and inflation concerns dragged consumer sentiment to a record low in April, according to the widely tracked survey from the University of Michigan.

Even if the conflict were to reach a permanent end, it may be too late to salvage the spring buying season, says Redfin’s chief economist Daryl Fairweather.

“Most people are deciding whether they’re going to make a move around this time of the year,” she says. “Unfortunately we’re kind of missing out on the peak or the beginning of the peak already.”

Policy Solutions

Nearly three-quarters of Americans believe investors are responsible for the affordable housing crunch, survey data show. But data paints a more limited picture.

In the wake of the 2008 recession, a handful of companies, including Invitation Homes and AMH (previously American Homes 4 Rent), snapped up tens of thousands of homes across the U.S. That may seem like a lot, but large institutional investors, defined as owning over 1,000 homes in at least three markets, own less than 0.5% of the total single-family housing stock, according to the Urban Institute. Still, it’s worth noting they have a significantly larger presence in some regions like Charlotte, North Carolina and Atlanta, where they own 25% of the single-family rental market.

That hasn’t stopped politicians from making institutional investors the boogeyman.

Following an executive order from President Donald Trump, the Senate approved bipartisan legislation to largely prohibit institutional investors from purchasing single-family homes. It’s now stalled in the House of Representatives, but Trump is pushing for the bill to move forward. The investor restrictions are a major sticking point between the chambers and weren’t included in the version the House passed back in February.

The reality of fixing the nation’s housing crisis is a combination of measures that unlock additional supply, from local zoning reform to lowering construction costs, experts say. The bills in the Senate and House take some of those steps, including making it cheaper to build manufactured homes, streamlining environmental reviews and incentivizing local governments to boost housing supply—but they’ve been overshadowed by the political debate about corporate landlords.

“It’s trying to find an easy button where there really isn't one,” rental housing economist Jay Parsons tells Forbes.