Rising mortgage rates and geopolitical uncertainty push the typical time-on-market to a five-year high. 

U.S. pending home sales dropped 2.4% year-over-year during the four weeks ending April 5, marking the sharpest contraction in three months as high mortgage rates and geopolitical instability cooled the spring housing market.

“Luxury buyers aren’t letting the high interest rates dissuade them, but for buyers on a tighter budget, the difference can be enough to kill affordability,” said Stacey Bryant, a Redfin Premier agent. “Cost-conscious buyers are also jittery about the rising prices of other things–like gas, food, and energy–cutting into their budgets.” 

The slowdown is also reflected in the pace of transactions. According to a recent report from Redfin, the typical home remained on the market for 51 days before going under contract. This represents the longest duration for this time of year since 2019, signaling a significant shift in buyer urgency.

Industry analysts attribute the cooling demand to a convergence of economic and situational headwinds:

Elevated Borrowing Costs: The weekly average mortgage rate climbed to 6.46%, hitting its highest level since last September.

Pricing Pressures: Home-sale prices rose 2.2% annually—the largest jump in a year. The combination of higher prices and rates has pushed the median monthly mortgage payment to $2,750.

Geopolitical Conflict: Ongoing war involving Iran has fueled market volatility and pushed rates higher. While a ceasefire announced Tuesday rallied markets and lowered oil prices, the conflict has left many potential buyers on the sidelines due to economic uncertainty.

Holiday Timing: The Easter holiday fell within this reporting period, unlike the previous year, causing a temporary dip in house-hunting activity.

The supply side also saw a pullback, with new listings falling 2.6% annually. The decline was most pronounced in Florida, with Tampa and Miami seeing drops of 17.2% and 13.5%, respectively. Conversely, a handful of markets defied the trend; San Jose saw a 14.4% increase in new inventory, followed by Philadelphia and Milwaukee.

Despite the drop in new listings, real estate experts noted that the broader landscape remains a buyer’s market in nearly every region of the country as inventory levels stabilize against thinning demand.