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conomic uncertainty and rising mortgage rates are causing potential homebuyers to hesitate, potentially slowing down the national real estate market. Key indicators include higher mortgage rates, declining loan applications, and a rise in days on market. With inventory up over last year, buyers have more homes to choose from, but new construction is slowing due to increased costs.

    "A lot of buyers are backing off because they're nervous about a potential recession," said Redfin Premier agent Venus Martinez. The typical home spent 47 days on the market before going under contract in March, the longest stretch since before the Covid-19 pandemic.

    Sellers may be overly optimistic about getting their asking price, with 81% expecting to get it or more, according to a recent survey by Realtor.com. However, if sellers don't lower their price expectations, home sales may slow in the coming months due to tariff fears and economic uncertainty.

    While recent data suggests slowing real estate activity, this could be a temporary blip that leads to a rebound. Mortgage rates will play a significant role in determining how potential homebuyers react. The 30-year fixed-rate mortgage averaged 6.83% this week, up from 6.62% the previous week.

    More buyers are considering adjustable rate mortgages (ARMs) as rates fluctuate, and housing construction is slowing due to rising costs. Builders face persistent supply-side and affordability challenges, including higher material costs and a shortage of skilled labor.

    As demand slows and inventory rises, year-over-year home price growth is getting closer to flattening. Redfin estimates annual price growth at 2.6% for the week ending April 13, down from around 5% at the start of 2025.