FILE PHOTO: A for sale sign is displayed for a residential home in Encinitas, California, United States, July 25, 2025.
Mike Blake | Reuters
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The all-important spring housing market is on track, but expectations are dashed due to the war in Iran and its impact on both the U.S. economy and consumer confidence.
Mortgage rates, previously expected to be much lower this spring than last spring, are now much higher, and concerns about jobs and inflation are throwing cold water on pent-up demand from homebuyers.
In the first quarter of this year, buyers were more concerned about the economy and mortgage rates than home prices, according to real estate agents who participated in CNBC’s quarterly housing market survey.
“They are afraid of war, they are afraid of the price of gas, [for] their job security,” said Faith Harmer, an agent in the Las Vegas metro area.
The CNBC Housing Market Survey is a national survey of randomly selected real estate agents across the United States. Responses to the first quarter survey were collected between March 24 and 30. This quarter, 70 agents shared their views.
Asked what their buyers’ top concern was, about a third of agents said the economy, while another third cited mortgage rates. The latter marked a significant jump from just 26% in the fourth quarter.
Only 9% of agents surveyed in the first quarter survey said pricing was their buyers’ top concern, down from 18% in the previous period.
This should come as no surprise, since the average rate on 30-year fixed-rate mortgages hit a low of 5.99% the day before the war in Iran began, and then began to climb. It now hovers around 6.5%.
Yet while most agents said prices were stable or falling, nearly twice as many agents, 29 percent, reported a rise in home prices in the first quarter compared to the previous quarter. Price dynamics can vary significantly depending on the market and region of the country.
But affordability isn’t improving as much as most experts expected. When asked how affordability affects buyers, 19% of agents said it causes them to get out of the market. This is up from just 11% at the end of last year.
More than half of agents reported at least one contract cancellation.
“Buyers who were hesitant and deciding to buy are now hesitant and going the other way, saying, ‘I’m not going to buy,'” said Eric Bramlett, an agent in Austin, Texas.
As buyer demand decreases, homes stay on the market longer. In the first quarter, 31% of agents said their listings had been on the market for more than six weeks, compared to 26% in the fourth quarter.
“We just had one recently where they wanted what they wanted, and they didn’t want to go down to a price that the market could support,” said Harmer, the agent in Las Vegas. “In the end, they just took it off the market.”
Sellers are now more concerned about this waiting time. At least 37% of agents surveyed said time on market was their sellers’ top concern, up from 30% at the end of last year.
This pushed price to the top of sellers’ concerns, rising from nearly half of agents to 39%.
Still, fewer agents reported price drops than in the previous quarter, but this could be a result of seasonal dynamics and the impact of lower mortgage rates midway through the first quarter, which gave buyers greater purchasing power.
That may also be why fewer agents reported having to write off homes compared to the fourth quarter, when agents reported a slower-than-usual market drop with more frustrated sellers.
Even as concerns about the economy and interest rates rise, agents in the first quarter still said the market was either in the buyer’s favor or balanced. The share that qualifies as a buyer’s market fell quarter over quarter, from 42% to 36%, likely due to these new headwinds for buyers – higher mortgage rates, war and a weaker job market. And sellers are taking note.
“We’ve already had two sellers who were planning to list in May and decided, ‘Let’s wait, let’s look later in the summer for our next house to buy, and then we’ll try to list in the fall,'” said Dana Bull, a Boston-area agent. “They originally thought spring would be perfect for them, because they felt like it would be the best time, and now they don’t feel as confident and they want to wait and see.”
Just over half of agents surveyed said they expect the market to improve as spring progresses, but that share is well down from late last year, when there was no war.
A higher proportion of agents said they expect the market to remain the same as last quarter, which is significant given that the market is transitioning from a historically slowest season for housing to the typically busiest season.