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How would you describe the state of the housing market in your city right now in one word?

In one word nuanced, good and bad weird.

Those were the voices of real estate agents I talked to in a few major US cities.

And while there's no single perfect word to capture the vibe of the housing market this past season, the data itself is clear.

This spring, across the board, people aren't buying and selling as much as they normally do.

I think spring was just a time of turmoil.

Colin Wainwright is a real estate broker in Nashville, Tennessee.

So what we ended up seeing is a little bit of a freeze, a little bit of flattening out.

A lot of buyers are still failing locked out.

April through June is usually the busiest time for the real estate industry, when the school year is ending and families are to move before everything starts back up again in the fall.

But this May, the number of Nashville homes sold was down sixteen percent compared to last year, according to the real estate brokerage Redfin.

Sales ticked up slightly in June, but Bloomberg's US housing reporter Prashant Gopaul says there's an even grimmer picture for home sales emerging across the country.

I looked at the spring season and that was the lowest since twenty twelve.

His one word to describe the market.

Week, I mean, actually, you could say it's the weakest housing market since the wake of the Great Financial Crisis.

When it comes to real estate, people always talk about whether we're in a buyer's market or a seller's market.

But Ansley Stokes, a realtor in the Washington, DC area, says this spring freeze has left everyone frustrated.

In a slower market like we're in now, and both parties can sometimes feel like they are losing.

I'm Sarah Holder, and this is the big take from Bloomberg News Today.

On the show, a Stalemate in the American housing market, How unaffordability and uncertainty have combined to slow down US home sales, and what could get people moving again.

Buying a house in the US has become more and more of a pipe dream for many Americans.

But Bloomberg's Pishanko Paul says there were signs that the country's punishing housing market was starting to get better, at least for some buyers.

At the beginning of this year.

We saw more people starting to list their homes again.

We saw inventory as a whole started to rise, and then mortgage rates ticked down slightly.

So all of that really looked positive.

It looked like we were finally beginning to break out of the cycle.

But that didn't quite.

Happen because just as things were looking up, the economy started feeling the effects of Trump's first few months in office.

Those inventory levels rose, but buyers didn't show up, and you know, they didn't show up because there was a lot of chaos in the economy.

The Trump administrations cuts to the federal workforce continue.

And the moves at Wall Street plumbers, small business owners are terrified over what's next.

After President Trump's tariff announcement, it was one thing after the other, and I think a lot of buyers just werespooked by the whole thing.

That's the big change this year.

We track the absorption rate.

It's basically what percentage of the available inventory is getting taken off the market by buyers in any given one month period.

That's Annsley Stokes, the realtor who works in the Washington DC area.

The higher the absorption rate, the stronger the market is from a seller's perspective.

So we've seen that absorption rate kind of steadily fall off since the beginning of the year, and it has largely dovetailed with the election and with all of the changes coming down from the federal government.

Cuts to staffing in Washington hit the DC area especially hard with its high population of federal government employees, but the rest of the US felt the impacts of the new administration's policies too.

Buyers, they're up against worsening affordability, but in the background, there's also uncertainty with the trade war and just the overall economic situation, federal layoffs, layoffs in the tech industry.

Darryl Fairweather is the chief economist at Redfin.

A lot of buyers aren't feeling like now is the right time to commit to a really big purchase.

The median home price in America was over four hundred thousand dollars in April, and mortgage rates have been hovering around six point eight percent for much of this year.

Home sales are near record lows, and that's because there are so few buyers out there.

If fewer sales are happening.

You'd think sellers might bring down prices to help attract buyers.

Is that happening.

Well, instead of bringing down prices, sellers are just like kind of taking the ball and going home.

They're staying put instead of participating in the housing market.

They don't feel like it's worth it to lower their price because if they were to re enter the market, they feel like they couldn't afford to buy the same kind of home that they're in.

Some of those would be sellers also locked in low mortgage rates during the pandemic, Like per Shant.

I have a two point three percent mortgage rate.

Wow, I'm sure a lot of listeners would be jealous to hear that.

To get me to get rid of that two point three percent rate and take on you know wherever it is now six point eighty five percent is not going to be very easy.

So for me to sell, I have to really have a good reason to sell and buy something else.

It's called the mortgage lock in effect.

And Annsley, the DC realtor we heard from earlier, says that cycle of sellers feeling locked in buyers having limited options can be demoralizing for sellers.

Looking back, over the past, you know, five years, and watching how quickly everything's sold, and it seemed like everybody who listed a house got multiple offers and the sellers got everything that they were looking for.

And so now all of the sudden sellers feel very beat up.

They're feeling very defensive.

They think their properties are selling for less than they should be, so that causes a lot more friction in a transaction.

Sellers looked at this market and they said, wow, this this kind of sucks.

So to paint a picture, prices are still high, mortgage rates are still high, sales are way down, and new listings are starting to retreat, and that's created sort of this perfect storm.

Yeah, I think that's true.

You know, there's certain reasons why people have to sell in any economy, right if you get a divorce, if you have a kid, if you have to move for a job.

Those people will move no matter what's going on.

But there are other people who can choose to move or not move.

Those are the people who might be pulling back right now in terms of listing their homes.

So what's going to thaw out the frozen US housing market?

That's after the break we've talked about what's keeping US home buyers and sellers in a stalemate right now?

High prices, high mortgage rates, and a rocky economic outlook.

But what could turn things around, Bloomberg's Pishanko Paul says would be buyers and sellers are holding out for one of those things, in particular, to change mortgage rates.

A lot of people are talking about this magic six percent rate, which you know, I don't know how true that is.

Maybe there is some magical rate that if it drops below that, psychologically that's enough to get buyers off the fence.

This week, the Federal Reserve chose to hold interest rates study, which means mortgage rates likely won't change dramatically unless there's a major shock to the economy.

At the FED meeting on Wednesday, when chair Jerome Powell was asked about what his rate decision meant for the housing market, he pointed to another issue beyond rates.

Yeah, we haven't built enough housing.

This is not something that FED can help with.

But then that'll be the case even after things normalize, and Powell is right, even if mortgage rates do come down, the US is still short some four point seven million homes.

According to illo I, asked Daryl Fairweather at Redfinn about this.

What role does increasing housing supply and increasing that inventory play in getting out of this stalemate.

Well, new construction is playing a much bigger role in the market than it has, you know, in the last decade.

Because of the fact that there are so few existing homes for sale, many people are turning to new construction.

In terms of new construction single family homes, those tend to be the most expensive because they're brand new, They're going to cost more, and for a first time buyer, it's oftentimes like too big of a hurdle to go straight to that new construction home.

Most people choose starter homes that are existing homes, But new construction of DNSE housing like missing middle housing, like town homes duplexes, can really do a lot to make that entry point more viable for a first time buyer.

Some cities and states around the country are doing things like loosening oning restrictions to try and encourage construction of that missing middle housing, essentially homes that are somewhere between a single family home and a high rise building.

And there are efforts to address the housing crisis at the federal level too, just This week, the Senate Banking Committee advanced legislation meant to spur more housing development and make it easier for Americans to access loans to buy and repair homes.

The bill will face House approval in the fall, but Darryl says supply is always just one part of the puzzle.

I think all of these solutions are going to be really helpful.

Part of the problem is is that with high interest rates, it's really expensive to build that kind of housing, and people have a lot of their equity locked up in their homes.

So if mortgage rates were to fall, it could actually help development as well.

So that's one reason to hope for lower interest rates.

It can take time for these long term efforts to pay off, for policy changes to pass, or for new construction to break ground.

In the meantime, the real estate agents I spoke with are seeing their clients react to the realities of the housing market as it stands now.

We're seeing a record number of price reductions from a list price perspective, and then we're seeing additional price concessions once negotiations start.

DC Area realtor Ansley Stokes says sellers are finally starting to meet buyers where they're at for advice to those sellers set realistic express patients.

Doesn't matter that a year ago that the similar house sold for ten percent more.

That is not the market today.

Everyone's used to the COVID market where you know, sellers could put a house on the market and get anything they wanted for it.

That's Christina Kipping, a real estate agent based in Tampa.

I just got a buyer under contract fully escated this morning, and with them it was we weren't going out first weekend making offers.

That's not happening anymore.

Buyers are looking at house as if they like it, they may go back two weeks later after they've done full on research of the neighborhoods, the schools, you know, walkability.

I just say buyers are being a little bit more patient.

But not everyone can afford to take their time.

There's an old adage in real estate about all the d's that drive real estate purchases.

Colin Wayne right from Nashville again.

You have death, divorced diapers, diamonds, debt.

All of these things are life events that drive the real estate industry forward and make people need to have a change in their housing needs.

And so a lot of people who had been sitting on the sidelines when the rates first jumped up.

They may have been able to wait for a little while, but a lot of times those d's can't wait anymore, and so the market has to turn forward.

This is the Big Take from Bloomberg News.

I'm Sarah Holder.

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