Fear as home buyers bail at record level, raising alarm crash is close
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The usually sizzling hot US spring housing market is the worst it's been in decades — with serious fears of a market crash scaring terrified buyers out of home contracts . Sky-high housing costs, soaring mortgage costs, and fears of an deep economic downturn are keeping buyers away.
Home sales in the US plunged 3.4 percent year over year during the four weeks ending on May 11. That's the lowest level for this time of year since 2020, when the pandemic brought the market to a halt . Redfin agents in many parts of the country, including Oregon , North Carolina, Texas and Ohio , report that buyers are backing off because they're too nervous about the future.
There's also a holiday effect. Easter fell into this year's four-week period, but not the comparable period in 2024. Agents report increasing nerves among house hunters, so much so that many potential buyers now cancelling home buying contracts at the last minute. 'There's a lot of doubt and hesitation,' said Meme Loggins, a Redfin Premier agent based in Portland , Oregon.
'People start looking, get excited, then they speak to their lender and reality sets in. That monthly payment knocks the wind right out of them.' Loggins added that fears over tariffs, a looming recession, and potential mass layoffs are also contributing to the horrible housing market. New listings are up 5.1 percent and the total number of homes for sale has climbed 14.3 percent.
It's a bad market for sellers too. Nearly half of sellers are being forced to offer concessions in order to unload their homes. They're growing so desperate they're offering price cuts and repair credits. Some sellers are even helping with closing costs and paying months of HOA fees for their buyers. Redfin agents advise potential buyers to negotiate as much as they can. They also advise looking into smaller homes or condos as a way to keep mortgages and bills manageable.
'Mortgage rates won't come down unless all tariffs are removed — or the economy dips into a serious recession. Neither option is great for buyers.' Meanwhile, Detroit realtor Desiree Bourgeois told DailyMail.com that when potential buyers hear the words 'tariffs' or 'recession' they get cold feet. 'They're hearing the words "tariffs" and "recession," and it's making them nervous that if they buy now, the value of their home will decline, and they don't know whether mortgage rates will go up or down,' she said. 'There's a lot of uncertainty out there, with buyers trying to understand how their purchase would fit into their personal finances and the broader economic puzzle.'
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