For two years, the housing market was a miserably competitive place. Prices soared by 45 percent, bidding wars became commonplace, and houses flew off the market. The frenzy came to a screeching halt last spring, as mortgage rates doubled in a matter of months, further driving up the cost of buying a home and freezing buyers out of the market.

But this spring, as the market begins to show signs of emerging from hibernation — home searches are up again! — buyers have been hoping that maybe, finally, this is their moment. Instead, they are walking into an environment that is still pretty miserable.

“This is the year of disappointment,” said Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers and Consultants. “The sellers aren’t going to get their 2021 prices, and buyers aren’t going to get a substantial savings on the price. Everyone is in the same boat.”

After a tumultuous few years, we seem to have arrived at a standoff: Buyers are no longer able to overpay, and sellers are unwilling to lower their prices — and, in many cases, even to sell their homes.

Visit a real estate listings site, and odds are you won’t find much. Week after week, few homes hit the market: New listings were down 20 percent in March from the same time a year ago, and down almost 27 percent compared to March 2019, before the pandemic, according to information from The houses that are available tend to be overpriced or in need of work, real estate agents say. Sellers are not offering significant discounts, with national listing prices up 6.3 percent in March from a year earlier, to a median of $424,000, according to

While sale prices may have leveled off nationally (according to Redfin, the median sale price slipped 1.8 percent, to $360,500, in the four-week period ending March 26, from the same time a year earlier), they are hovering near historic highs. And interest rates are well above 6 percent (in late March they were 6.42 percent, up from 4.42 percent a year earlier, according to Freddie Mac). That makes it expensive to buy a home and risky to sell one, if your current mortgage rate happens to be closer to 3 percent.

Add in a hefty dose of economic uncertainty — inflation, the prospect of financial instability, the war in Ukraine — and buying or selling a home could feel somewhat unnerving.

Not Exactly a Buyers’ Market

Spring is usually the busiest time for the housing market. But this year, there isn’t the usual momentum. Lawrence Yun, the chief economist for the National Association of Realtors, said he expects we’ll see somewhat “better than frozen conditions” during the second quarter of the year — unless, of course, interest rates fall “measurably,” turning icy conditions into “vibrant” ones.

Still, there’s an appetite to shop. Home showings are up 20 percent since the start of the year, according to ShowingTime, a company that tracks that activity. Google searches for “houses/homes for sale” are up 20 percent from the beginning of the year. Mortgage applications were up 19 percent the week ending March 24, compared with the previous four weeks, according to data from Redfin.

“Relative to a couple of months ago, we’re seeing traffic pick up — we’re seeing fewer buyer cancellations — that’s more telling of what lies ahead,” said Greg McBride, the chief financial analyst for

But there isn’t a lot to choose from. Why? Developers stopped building as many new houses as soon as the market cooled, after not building nearly enough for years. And as Daryl Fairweather, the chief economist for Redfin, put it: “Homeowners who have locked in record low mortgage rates have no incentive to sell right now. It’s not like the bottom is falling out.”

At the end of February, the United States had 2.6 months’ supply of homes to buy, according to the National Association of Realtors. That might sound like plenty, but it’s not: A healthy housing market has about four or five months’ supply.

With so little inventory, the number of homes under contract fell 19 percent year over year in the four weeks ending March 26, down in all 50 of the country’s most populous markets, according to Redfin.

“Anything decent is going at list or above price,” said Andre Aivazians, an associate broker with HomeSmart who sells property in Westchester, Putnam and Dutchess Counties, in New York. “We’re still getting multiple offers.”

In February, Cassandra Small and her husband started house hunting in northern New Jersey, assuming they would have no trouble finding a three-bedroom house in move-in condition. Instead, they discovered there were few options, and they had lots of competition for those homes. One, in Wayne, N.J., received 35 offers. Their offer — at $100,000 over asking price — was declined.

“Everyone else is searching for the same exact things,” said Ms. Small, 36, a publicist whose wish list includes a primary bedroom with an en suite bathroom and an updated kitchen. “We’d look at each other, and I’d say, ‘Are our standards too high?’”

Will Prices or Mortgage Rates Fall?

Many real estate professionals are operating under the assumption that we’ve hit bottom.

The prevailing wisdom seems to be that prices will start to rise again as potential sellers who have held off on listing their homes decide they can’t wait any longer, and buyers become acclimated to the higher interest rates and come around to the idea of paying more. “You can only put those decisions on hold for so long,” said Rory Golod, the president of growth and communications for Compass.

That may have already started to happen in some places. While sale prices were down 4.5 percent in the Northeast and 5.6 percent in the West in February from a year earlier, according to the National Association of Realtors, they were up 5 percent in the Midwest and 2.7 percent in the South. The median sale price in Manhattan may have fallen 7 percent in February 2023, to $1.06 million, compared to the same time year ago, according to data compiled by Miller Samuel, but in Orlando, Fla., prices were up almost 4 percent, to a median of $358,000. In other cities, like Houston, prices remained virtually flat, falling less than 1 percent, to a median of $302,250, during the same period, according to Miller Samuel.

But even without a price increase, buying a house today is more expensive than it was a year ago, and considerably more expensive than it was before home prices rose at their fastest pace in history during the first part of the pandemic.

Buy a median-price home today, with a 20 percent down payment on a 30-year loan, and you’ll pay $1,808 a month in principal and interest, 23 percent more a month than you would have paid if you bought the same home a year ago, when the median sale price was $367,225 and interest rates were 4.42 percent.

If that depresses you, are you sitting down? That house you buy today will cost you 84 percent more a month to own than it would have if you bought it in March 2019, when the median price was $255,875, interest rates were 4.06 percent, and your monthly payments would have been a humble $984.

A buyer’s only reprieve, it would seem, is a drop in interest rates. But how likely is that? Bob Walters, the chief executive of Rocket Mortgage, predicts that mortgage rates will remain stable, or maybe slip a little in the months ahead, barring “an unwelcome inflation report.”

But even if interest rates fall below 6 percent, they may not approach the enviable 2.5 percent rates that fueled the pandemic housing boom. “Interest rates don’t follow the laws of physics,” said Kate Wood, a NerdWallet home expert. “They’re not bound to come down because they went up.”

Renters Relief, Sort Of

So what’s a potential buyer to do? Renting doesn’t offer a terribly appealing alternative.

While rents are no longer rising at the dizzying clip they did during the second year of the pandemic, they have not fallen either, leaving renters across the country paying historically high rents. In March, the national median rent, at $1,350 a month, was up 2.6 percent from a year earlier, a far more modest hike than the 17.6 percent spike that occurred in 2021, according to Apartment List.

In New York City, where the median asking rent was $3,470 at the beginning of the year, a renter would have to earn at least $139,000 a year — almost twice the city’s median household income — to avoid being rent burdened, according to StreetEasy.

These “affordability challenges have been years in the making,” said Kenny Lee, a StreetEasy economist. Over the past decade, New York State has created 1.2 million jobs, but only 400,000 units of housing statewide.

In New York City, however, renters have a little more power than they did a few months ago: In February, 16 percent of rental listings offered discounts, up from 11 percent a year ago, according to StreetEasy.

Nationally, renters are also in slightly better shape than they were a year ago. In January and February, apartments stayed on the market longer, as there were fewer people competing for them than a year earlier, according to RentCafe. “The demand isn’t there,” said Doug Ressler, the manager of business intelligence for Yardi Matrix, which provides data for RentCafe.

And close to a million units of new multifamily housing are under construction, the highest number since 1973, much of it in the Sun Belt. “There are a lot of apartments in the construction pipeline,” said Robert Dietz, the chief economist for the National Association of Home Builders. “That will tame some of the rent growth.”

Cockroaches in the House

Buying a house isn’t just a financial commitment. It’s an emotional investment — one that can’t help but be affected by larger forces.

If you think the economy is vulnerable to recession, you may decide to stay put another year. If you’re worried about losing your job, you’re likely to hold off on signing a contract.

The spring housing market may not look as rosy as many had hoped, but “if somehow the economy tips into a recession, you are looking at job cuts,” said Mr. Yun, the economist for the National Association of Realtors. “Then it is going to be a much more challenging market for home buying.”

And if the Federal Reserve’s efforts to slow inflation by rapidly raising interest rates creates an “over-tightening” of the economy, he noted, it could put pressure on regional banks that play a key role in mortgage lending, which would also adversely affect the housing market.

With so many wild cards out there, it’s hard to predict exactly what will come next. But Dr. Fairweather of Redfin offered an analogy likely to resonate with many people.

“If you see one cockroach in your house, and you kill it or you get it out of the house, maybe you dealt with that cockroach, but it makes you worry that there are more cockroaches,” she said. “It gives you that paranoia that there may be more issues in the financial system that have yet to reveal themselves.”

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