Buyers are actively searching and applying for loans, yet many remain hesitant to close deals
More prospective homebuyers are re-entering the market as mortgage rates decline, but the uptick in house hunting hasn’t yet translated into actual home sales.
According to a new Redfin report, mortgage applications and home tours have increased as borrowing costs ease, yet pending home sales remain sluggish as buyers remain cautious about economic uncertainty.
Mortgage applications rose 7% this week, and Google searches for “homes for sale” increased 10% month-over-month, according to Redfin’s Homebuyer Demand Index - a seasonally adjusted measure of buyer activity such as home tours and agent requests.
Despite this renewed interest, pending home sales declined 6.1% year-over-year for the four weeks ending March 9, a continuation of the stagnation seen in recent months.
Freddie Mac reported that the average 30-year fixed mortgage rate stood at 6.65% as of March 13, 2025, barely changed from 6.63% last week. That’s lower than the 6.74% average this time last year, providing a slight boost in affordability. Meanwhile, 15-year fixed mortgage rates averaged 5.80%, a marginal increase from 5.79% last week, but still well below last year’s 6.16%.
Despite recent market volatility, Freddie Mac chief economist Sam Khater noted that mortgage rates remain lower compared to recent months, which is encouraging some buyers to return.
“Purchase applications are up 5% compared to a year ago,” Khater said. “The combination of modestly lower mortgage rates and improving inventory is a positive sign for homebuyers in this critical spring homebuying season.”
While lower rates have piqued buyer interest, economic concerns are still holding many back from making a purchase. Redfin Economic Research Lead Chen Zhao pointed to worries over tariffs, a slightly weaker-than-expected job market, and broader economic uncertainty as key factors affecting buyer confidence.
“Lower mortgage rates have brought some house hunters off the sidelines,” Zhao said. “But they haven’t yet led to more sales because prospective buyers are still figuring out whether lower payments are enough to justify a home purchase in today’s uncertain economy.”
Read next: America's richest 1% could buy nearly the entire housing market
Zhao added that many Americans remain concerned about job security and a potential recession, which could further delay major financial commitments like home purchases.
On the supply side, new listings are up 3.1% year-over-year, a trend that has been gradually increasing over the past month. Redfin anticipates that listings will continue to rise as spring homebuying season picks up, especially as homeowners notice growing demand from buyers.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
