Recent mortgage and home sales data isn’t likely to lift the moods of buyers or sellers navigating a challenging housing market, but there might be a few buds forming as spring approaches. 

The rate on 30-year, fixed mortgages averaged averaged 6.65% in the week ending March 13, sitting near two-month lows in Freddie Mac’s weekly lending survey.¹ While the rates have eased in early 2025, the downward moves haven't been seen as big enough to dramatically kickstart sales.²

Sales of existing US homes fell 4.9% from December to January, reaching a seasonally adjusted annual rate of 4.08 million in January, according to the National Association of Realtors.³ The drop comes after a stretch of gains since September, which some professionals saw as a possible sign that buyers and sellers might be getting used to higher rates.⁴  

Perhaps not. Cash sales accounted for 29% of transactions in January, comprised mostly of individual investors and second-home buyers, according to NAR. First-time buyers were responsible for just 28% of sales, down from 31% in December but off the all-time low of 24% last November.⁵

Read more: Will 2025 be the year of the first-time home buyer?

Opportunities and challenges 

There are some bits of good news. While rates remain high, they’ve hovered below 7% — a sign of stability that could bode well for potential buyers and sellers in the busy months ahead, according to Freddie Mac.⁶

More negotiating power is another promising sign for buyers facing high rates. The typical home sold in January was on the market for 57 days, the longest span in five years, according to data from Redfin. And the typical home is selling 2% below the asking price.⁷

The trend is pronounced among homes that need renovations or have special requirements like flood insurance. Buyers in some parts of the U.S. are seeing increased flexibility from motivated sellers, with some throwing in personal items, from pianos to patio furniture, to get sales done.⁸

But there’s no question that costs remain high, even if buyers are gaining an edge. Home prices sped up as 2024 came to a close, rising 3.9% annually in December, according to the latest S&P CoreLogic Case-Shiller index.⁹ 

Real estate commissions also aren’t easing, despite new rules that give prospective buyers more transparency and a greater say on the fees that their agents split with sellers’ agents — often 6% of the sales price. Some had expected commissions to plunge after rules took effect in August, making transactions less expensive for buyers and sellers, but that hasn’t happened.¹⁰

Coming trends for the all-important spring season will be first reflected in mortgage application data released in the coming weeks.¹¹ Peak buying and selling season is typically April through June, as better weather and the close of the school year encourage more home sales.¹²

Read more: Mortgage rates and the housing market

Balancing out 

For 2 in 5 Americans, buying or owning a home is the definition of financial happiness, according to Empower research.

It also doesn’t hurt to be sitting on record amounts of home equity. U.S. households have roughly $35 trillion in home equity, according to the latest Federal Reserve data, with a 75% surge occurring since 2020.¹³

But some are tied to their treasure. Nearly 7 in 10 borrowers currently have a mortgage rate below 4.5% and roughly one-quarter have an ultra-low rate below 3%. Moving to a new home would require those borrowers to get a more expensive mortgage or to plunk down cash.¹⁴ 

That so-called lock-in effect has helped keep sale inventories low, but things might be balancing out a bit more as spring approaches. The number of previously owned homes on the market increased to 1.18 million houses in January, which equals between three to four months of supply.¹⁵

That’s far from the little more than one month of supply that existed in January 2022 and closer to the six months of supply that’s regarded as ideal for a healthy, balanced market.¹⁶

Read more: Equity rich: How Americans built $30k-a-year in value