Mortgage rates have edged lower, giving potential homebuyers a glimmer of hope — but ongoing affordability challenges and economic uncertainty continue to weigh down the spring housing market.
The average 30-year fixed mortgage rate dipped to 6.76% this week, slightly below last week’s 6.81% and down from over 7% a year ago. Despite this progress, rates remain high enough to keep many buyers on the sidelines, with economists warning that a return to significantly lower rates is unlikely in the near term.
Affordability remains the biggest obstacle. The median U.S. monthly mortgage payment hit a record $2,870, according to recent housing data, and the income required to afford a median-priced home has surged more than 70% since 2020.
Still, there are signs that buyers are watching rates closely. Pending home sales rose 6.1% in March over the previous month, suggesting that even small rate movements influence purchasing decisions.
Inventory is improving, which could offer some relief. New listings are up over 6% year-over-year, while total active listings have jumped nearly 14%, according to recent four-week data. However, supply remains below pre-pandemic levels, limiting options for buyers.
Meanwhile, mortgage application activity has slipped again, down 4.2% in the final week of April, highlighting ongoing hesitance amid job market concerns and financial pressures. While the market is slowly rebalancing, meaningful growth may depend on more stable economic signals and further progress on affordability.