The spring homebuying season in the United States this year seems to be quieter than usual. According to the latest report from real estate brokerage firm Redfin, while new listings continue to increase, potential buyers are hesitant or choosing to wait, mainly due to two reasons.
The report shows that in the four weeks leading up to May 11, the volume of pending home sales decreased by 3.4% compared to the same period in 2020, dropping to the lowest level recorded since then.
Redfin believes that there are two main reasons why buyers are not rushing into the market. Firstly, rising housing prices and mortgage rates, such as the median monthly housing payment in the U.S. reaching $2,860, marking a 4.3% annual increase.
The second reason is that many buyers are concerned about the current uncertain economic outlook. In addition, some holiday effects have also influenced the timing of people’s home purchases.
Some real estate agents have observed that many buyers are currently looking for apartments or smaller homes, preferring to simplify their lives and lower their monthly mortgage payments. On the other hand, both buyers and sellers are in a relatively “relaxed” state: potential buyers have money but are not in a hurry to buy, while sellers do not urgently need money and therefore are not in a hurry to sell.
For the past few years, high home prices and high interest rates have been the biggest obstacles for buyers. Freddie Mac data shows that in the week ending May 15, the average fixed mortgage rate for a 30-year term was 6.81%, and for a 15-year term it was 5.92%.
Chen Zhao, the director of economic research at Redfin, pointed out that while the news last week about the U.S. reducing tariffs on China boosted the stock market, it also pushed up mortgage rates.
“For homebuyers, this is a dilemma,” said Chen Zhao in a statement. “Unless all new tariffs are lifted, or the country descends into a significant economic downturn—which would reduce the housing budgets of many Americans—mortgage rates are unlikely to decrease.”
Each spring, the housing supply in the U.S. tends to increase slightly. The Redfin report shows that in terms of sales, the overall new listings in the U.S. increased by 5.1% year-on-year, with a 14.3% growth in total homes for sale.
Agents believe that for buyers, the benefit of increased supply and limited demand is that nearly half of sellers are willing to negotiate on price. After negotiations between buyers and sellers, the seller may agree to lower the selling price or cover some repair and transfer costs.
Although buyers have more options, home prices in some major metropolitan areas are still rising. The Redfin report found that in five major cities, including Newark, New Jersey, Philadelphia, Pennsylvania, Detroit, Michigan, Pittsburgh, Pennsylvania, and Miami, Florida, the median home prices saw the largest annual increases.
The highly-watched housing prices in California are significantly higher than the national average median home price. As of the first quarter of this year, the median home price in California exceeded $880,000, while the national average median home price is approximately $400,000.
The good news is that the pace of price increases in California has slightly slowed down, improving Californians’ housing affordability. The California Association of Realtors (C.A.R.) noted that in the first quarter of 2025, 17% of California households could afford homes priced over $846,000.
Experts believe that following seasonal patterns, the median home prices in California are likely to continue to rise in the coming months, but due to market uncertainty and concerns about the economic conditions, the growth of home prices in the second quarter may still be moderate, and home sales in the next few months may continue to be sluggish.