T
he housing market may be on the cusp of a spring revival, but sales are still lagging behind last year's pace due to economic uncertainty. Mortgage rates have fallen for seven consecutive weeks, with this week's average rate of 6.63% being the lowest since December. This decline is expected to "spur on the housing market," according to Realtor.com Senior Economist Joel Berner.

    Touring activity and purchase applications are rising, indicating more buyers are entering the market. The Mortgage Bankers Association reported a 9% increase in purchase applications last week compared to the previous week, with some of this growth attributed to seasonality but still showing an uptick from last year's pace. Refinance applications also saw a significant boost, increasing by 37%, the fastest pace since October.

    However, pending sales continue to fall, down 6.4% at the beginning of March according to Redfin's latest weekly housing report. This is consistent with recent data showing an all-time low in January for the Pending Home Sales Index. The slow pace of sales can be attributed to high home prices and economic uncertainty.

    While lower mortgage rates may provide a psychological boost to buyers, affordability remains a concern as home prices continue to rise. Buyers could save around $100 on their monthly mortgage compared to January when rates were at 7%, but this is offset by the fact that today's buyers can expect to pay 5.3% more each month compared to last year.

    Economic uncertainty surrounding tariffs and other policies may drive mortgage rates up or down, with some analysts predicting a cut in the Fed Funds Rate by 75 basis points this year. Buyers should be prepared for rate volatility and act quickly if they see rates dip, as they could easily come back up.