Iran war upends spring housing market. Here’s what real estate agents are seeing
- 4 days ago
- 2 min read
The all-important spring housing market is well underway, but expectations are falling short due to the war in Iran and its impact on both the U.S. economy and consumer sentiment.
Mortgage rates, which were previously forecast to be far lower this spring than last, are now much higher, and concerns over employment and inflation are throwing cold water on pent-up homebuyer demand.
Buyers in the first quarter of this year were more concerned about the economy and mortgage rates than they were about home prices, according to real estate agents who participated in the quarterly CNBC Housing Market Survey.
“They’re fearful of the war, they’re fearful of gas prices, for their job security,” said Faith Harmer, an agent in the Las Vegas metropolitan area.
The CNBC Housing Market Survey is a national inquiry of real estate agents selected randomly across the United States. Responses for the first-quarter survey were collected between March 24 and March 30. This quarter, 70 agents shared their insights.
When asked about their buyers’ primary concern, about one-third of agents said the economy, while another third said mortgage rates. The latter marked a big jump from just 26% in the fourth quarter.
More than half of agents reported at least one contract cancellation.
“Buyers that were on the fence and deciding to buy are now on the fence and going the other direction, saying, ‘I’m not going to buy,’” said Eric Bramlett, an agent in Austin, Texas.
As buyer demand drops, homes are sitting on the market longer. In the first quarter, 31% of agents reported that their listings were on the market for more than six weeks, compared with 26% in the fourth quarter.
Even as concerns over 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 called it a buyer’s market did drop quarter to quarter, from 42% to 36%, likely due to those new buyer headwinds – higher mortgage rates, the war and a weaker job market. And sellers are taking note.
Just over half of agents surveyed said they expect the market to improve as the spring goes on, but that share is way down from the end of last year, when there was no war in the picture.
A higher share of agents said they expect the market to stay the same as last quarter, which is significant, given that the market is going from the historically slowest season for housing to the usually busiest.
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