House Hunters Stayed on Sidelines As Rates Dipped Below 6%, Iran War Adds to Market Uncertainty
MWN-AI** Summary
The housing market has seen homebuyers largely remain on the sidelines despite mortgage rates dipping below 6% for the first time in over three years, primarily due to high prices and economic instability. According to a Redfin report, the median monthly housing payment fell to $2,591—a 2.8% decrease year-over-year—thanks to a reduction in the average 30-year mortgage rate to 5.98%. However, as rates are already on the rise again, concerns about global economic factors, including the ongoing conflict in Iran, are contributing to buyer hesitance.
The current environment has led to a muted demand for housing, despite a 1% increase in median home sale prices, which reached $381,750. This upward trend in prices is attributed to falling inventory rather than increased demand; pending home sales declined by 2.8% year-over-year, with new listings also down 1.2%. As desirable properties remain limited, competition for these homes persists, sustaining price pressures.
Moreover, the geopolitical situation has added another layer of uncertainty, with potential volatility in mortgage rates as market stability becomes a pressing concern. While some prospective buyers are putting plans on hold due to these anxieties, others show signs of renewed interest—mortgage-purchase applications saw a 6% increase week-over-week.
Overall, while there’s slight optimism with indicators such as increased touring activity and a higher interest level in home searches, many buyers remain cautious, influenced by both economic factors and the unpredictability of the global landscape.
MWN-AI** Analysis
As mortgage rates dipped below 6% for the first time in over three years, many potential homebuyers have remained on the sidelines, influenced by both high prices and broader economic uncertainties, including the risk stemming from the conflict in Iran. Recent data from Redfin shows that while the median monthly housing payment has fallen to $2,591—reflecting a 2.8% reduction year-over-year—home prices have not followed suit. The median home-sale price increased 1% year-over-year to $381,750, as inventory continues to decline even amid muted demand.
This juxtaposition of rising prices alongside dwindling inventory highlights a fundamental market dynamic: while some buyers are hesitant due to economic volatility and concerns over global conflicts, the scarcity of desirable homes creates competitive pressure that holds pricing steady. Sellers in markets that aren’t seeing quick turnover should be cautious about overpricing their properties, as homes that linger too long can lead to price reductions and limited interest.
Moreover, the ongoing conflict in Iran could exacerbate market jitters, potentially leading to fluctuations in mortgage rates and buyer sentiment. While there may be short-term volatility, analysts believe that the longer-term impacts will primarily be felt in the oil markets, lessening immediate threats to the housing sector.
For potential buyers, a strategic approach is necessary. First, monitor mortgage rate trends closely, as even slight increases can significantly alter affordability. Second, consider regional market conditions—focusing on neighborhoods with rising demand and limited supply may enhance the likelihood of finding a suitable property. In contrast, sellers should account for market conditions, pricing their homes competitively, especially in slower areas. Having a well-informed strategy can help navigate this complex market landscape effectively.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Redfin reports high prices and economic uncertainty kept demand muted; now, rates are already rising again and global tensions could add to homebuyer hesitation
The median monthly housing payment was $2,591 during the four weeks ending March 1, down 2.8% year over year, according to a new report from Redfin , the real estate brokerage powered by Rocket.
Payments are falling largely thanks to the weekly average mortgage rate dropping to 5.98% last week, down from 6.76% a year earlier and the first time it has dipped below 6% in three and a half years. (The daily average mortgage has risen from 5.99% last week to 6.07% on March 4.) On the other side of the housing payment equation, the median home-sale price rose 1% year over year to $381,750.
Prices are rising because despite slow homebuying demand, inventory is declining. Pending home sales fell 2.8% year over year. Meanwhile, new listings declined 1.2% and the total number of homes for sale dropped 1.9%, the biggest decline in over two years. While there are more home sellers than buyers in the market, there are still a limited number of desirable homes for sale, which creates competition for those desirable homes and modestly pushes up prices.
“Neighborhoods that have always been popular are just as popular with homebuyers,” said Mike DeMello , a Redfin Premier agent in Oahu, HI . “Move-in ready, single-family homes in those popular areas are attracting multiple offers, just like they always have. But neighborhoods that are typically slow are extra slow, and average neighborhoods are slower than usual. My advice for sellers in those places that aren’t red-hot: Don’t overprice, because if your home sits on the market for longer than a few weeks, it’ll probably sit on the market for months and eventually sell for a lower price.”
Overall, homebuying demand in much of the country is tepid because even though housing payments have declined, they’re still historically high; mortgage rates are still double pandemic-era lows. Some would-be buyers are also hesitant due to economic uncertainty, with many feeling jittery about stock-market volatility and the back-and-forth on tariffs.
Redfin Economists, Agents Say Impact of Iran War Likely to Be Small
The evolving conflict in Iran may also affect homebuying sentiment, though it’s too soon to tell how much.
“Last week, Americans were hit with headlines about mortgage rates dropping below 6%, which provided some hope. But over the weekend, those headlines were replaced with ones about the war in the Middle East,” said Chen Zhao , Redfin’s head of economics research. “The war could make some would-be buyers think twice, much in the same way economic and global uncertainty have been turning off buyers for the last year, and it’s likely to cause short-term volatility in mortgage rates. But the war’s impact on the economy will mostly be felt in oil markets, which are unlikely to have a big impact on mortgage rates or demand unless the conflict goes on much longer than expected.”
A Washington, D.C. Redfin agent reports one buyer is putting purchasing plans on hold due to uneasiness about tensions in Iran. But Redfin agents in several other places with large military populations, including San Diego and San Antonio, haven’t yet heard homebuyers or sellers bring up the Iran conflict.
There are a few bright spots this week when it comes to demand. Mortgage-purchase applications are up 6% week over week. And many Redfin agents, including DeMello in Oahu, expect this spring’s homebuying season to be stronger than last year’s.
For Redfin economists’ takes on the housing market, please visit Redfin’s “ From Our Economists ” page.
Leading indicators
Indicators of homebuying demand and activity | ||||
Value (if applicable) | Recent change | Year-over-year change | Source | |
Daily average 30-year fixed mortgage rate | 6.07% (March 4) | Up from 4-year low of 5.99% a week earlier | Down from 6.74% | Mortgage News Daily |
Weekly average 30-year fixed mortgage rate | 5.98% (week ending Feb. 26) | Lowest level in 3.5 years | Down from 6.76% | Freddie Mac |
Mortgage-purchase applications (seasonally adjusted) | Up 6% from a week earlier (as of week ending Feb. 27) | Up 10% | Mortgage Bankers Association | |
Redfin Homebuyer Demand Index (seasonally adjusted) | Up about 3% from a month earlier (as of week ending March 1) | Down 14% | A measure of tours and other homebuying services from Redfin agents | |
Google searches of “homes for sale” | Highest level since July (as of March 2) | Up 26% | Google Trends | |
Touring activity | Up 15% from the start of the year (as of March 2) | At this time last year, it was up 25% from the start of 2025 | ShowingTime |
Key housing-market data
U.S. highlights: Four weeks ending March 1, 2025 Redfin’s national metrics include data from 400+ U.S. metro areas and are based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision. | |||
Four weeks ending March 1, 2025 | Year-over-year change | Notes | |
Median sale price | $381,750 | 1% | |
Median asking price | $414,875 | 2.5% | |
Median monthly mortgage payment | $2,591 at a 5.98% mortgage rate | -2.8% | |
Pending sales | 75,684 | -2.8% | |
New listings | 84,841 | -1.2% | |
Active listings | 1,014,149 | -1.9% | Biggest decline since Dec. 2023 |
Months of supply | 4.8 | +0.1 pts. | 4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions |
Share of homes off market in two weeks | 31.8% | Essentially unchanged | |
Median days on market | 66 | +8 days | |
Share of homes sold above list price | 20.5% | Down from 22% | |
Average sale-to-list price ratio | 98% | Down from 98.2% |
Metro-level highlights: Four weeks ending March 1, 2025 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy. | |||
Metros with biggest year-over-year increases | Metros with biggest year-over-year decreases | Notes | |
Median sale price | Newark, NJ (7.6%) Philadelphia (5.7%) San Francisco (4.6%) Baltimore (4%) Chicago (4%) | Oakland, CA (-6.2%) Dallas (-3.7%) Boston (-3.5%) Denver (-3.3%) San Jose, CA (-2.6%) | Declined in 18 metros |
Pending sales | Milwaukee (12%) Portland, OR (7.4%) West Palm Beach, FL (6.9%) San Francisco (6.4%) Austin, TX (4.7%) | Nassau County, NY (-22.%) Oakland, CA (-19.5%) Houston (-15.4%) New Brunswick, NJ (-13.9%) Providence, RI (-12.8%) | |
New listings | Milwaukee (21.9%) Portland, OR (15.1%) Seattle (14.9%) Washington, D.C. (7.9%) Austin, TX (6.3%) | Nassau County, NY (-27%) Providence, RI (-22%) New York (-17.7%) New Brunswick, NJ (-15.8%) Newark, NJ (-13.9%) |
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-homebuyers-mortgage-rates-unease
About Redfin
Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.
You can find more information about Redfin and get the latest housing market data and research at https://www.redfin.com/news . For more information about Rocket Companies, visit https://www.rocketcompanies.com .
View source version on businesswire.com: https://www.businesswire.com/news/home/20260305877082/en/
Contact Redfin Journalist Services:
Tana Kelley
press@redfin.com
FAQ**
How do current economic uncertainties and rising global tensions impact the homebuying sentiment for potential buyers interested in investing in Rocket Companies Inc. Class A RKT?
With mortgage rates recently dipping below 6%, what opportunities could arise for investors in Rocket Companies Inc. Class A RKT and the broader real estate market?
Considering the report from Redfin, what strategies should investors adopt regarding Rocket Companies Inc. Class A RKT given the current housing demand fluctuations?
What are the implications of declining inventory and rising median home-sale prices for the future performance of Rocket Companies Inc. Class A RKT within the real estate sector?
**MWN-AI FAQ is based on asking OpenAI questions about Rocket Companies Inc. Class A (NYSE: RKT).
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