The muted spring homebuying market is heavily influenced by a rise in mortgage rates, hitting 7% following new tariffs announced by Trump. While sellers are listing homes, buyers remain hesitant due to economic uncertainty. NAR Chief Economist Lawrence Yun emphasizes that lower rates could stimulate market participation and economic growth. Despite some regional gains, the West saw a significant drop in existing-home sales. Geopolitical tensions, especially in the Middle East, add further economic stress, with potential impacts on oil prices and household budgets, keeping buyers cautious.
Increasing participation in the housing market will increase the mobility of the workforce and drive economic growth, said NAR Chief Economist Lawrence Yun.
If mortgage rates decrease in the second half of this year, expect home sales across the country to increase due to strong income growth, healthy inventory, and a record-high number of jobs.
Despite the additional inventory, buyers have plenty of macroeconomic reasons to proceed with caution.
Geopolitical events in the Middle East typically favor the bond market and the U.S. dollar, both of which tanked in the aftermath of Trump's tariff announcement.
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