US housing market posts worst spring selling season in 13 years

Business Times

3 days ago

[BOSTON] The US housing market just logged its slowest spring season in more than a dozen years, leaving Glennda Baker, a veteran real estate agent in Atlanta, struggling to sell 21 listings.
She's been slashing prices. But months of chatter about AI taking jobs and tariffs tanking the economy is feeding into buyer indecision.
'People say price solves everything,' Baker said. 'But price doesn't solve uncertainty.'
Spring is traditionally the busiest season in real estate, not unlike Christmas for retailers. And while the most unaffordable housing market in decades has sidelined all but the most determined buyers, there were signs earlier this year that conditions were right for a rebound.
By April, mortgage rates dipped, price growth flattened and the years-long inventory drought looked like it had finally broken. But that coincided with US President Donald Trump's 'Liberation Day' tariff bombshell, which sent shock waves through financial markets and pushed house hunters back into hiding.
Fewer sales contracts were signed in the US from April to June than in any year since 2012, according to data from Redfin. That was back when the housing market was still finding its footing after the collapse that fuelled the financial crisis.
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Before 2025, the previous two springs were also weak, pulled down by high rates and prices, but anxiety over the future of the economy has made things worse this time, said Chen Zhao, head of economics research at the brokerage.
Prices, however, are unlikely to plunge because sellers are starting to pull listings off the market, limiting inventory, she said.
'We thought we hit rock bottom but we keep discovering there's more rock bottom to be had,' Zhao said. 'You have a lot of people being afraid of what's to come.'
With consumer confidence ticking up and the stock market on a hot streak, the hope is that deals that normally might have happened in the spring will get pushed into summer. But there's likely to be only a small bump, according to Thomas Ryan, an economist at Capital Economics.
The rental market is gaining strength because many would-be buyers still cannot afford to purchase, he said. And as borrowing costs remain higher for longer, people have stopped assuming they can buy now and be able to refinance at a later date, according to Ryan.
'The outlook for the housing market is dire,' he said. 'Affordability is at its worst since the 1980s. Nothing has changed on that front.'
Location matters
One silver lining is that buyers have gained some negotiating power as listings climbed across much of the country. But as always in real estate, what matters most is geography. Prices continue to rise fast in the Northeast and Midwest, where inventory shortages are severe. Yet in Sun Belt markets such as Florida and Texas, where homebuilders were most active in recent years, the market is sinking.
In Las Vegas, active listings shot up more than 38 per cent from a year earlier while sales plunged 15 per cent, according to Redfin data for the four weeks to Jul 20.
The fear of missing out has shifted from buyers to sellers, said Angela O'Hare, an agent with Real Broker in the Las Vegas area. It does not help that sellers have to compete with homebuilders offering to subsidise mortgage rates and help cover closing costs, she said.
'Sellers who need to sell will make it happen,' O'Hare said. 'I had a listing at US$950,000. I cut it down to US$799,000 and had three offers.'
Even some of the country's hottest markets have lost some steam. In Narragansett, a picturesque beach town in Rhode Island south of Providence, homes that would have gotten a dozen offers a year ago now get three, if they are priced right, said Johnny Sheil, an agent with Mott & Chace Sotheby's International Realty.
'We are seeing a lot more price decreases throughout Rhode Island now,' Sheil said. 'Uncertainty scares some people.' BLOOMBERG