Total active listings reached their highest level in five years last month, up 14.1% from a year earlier. New listings rose 6% year over year, the most growth since July 2022.
“A lot of buyers, especially first-timers, are backing off because they’re nervous about a potential recession,” Venus Martinez, a Redfin agent in Los Angeles, said in a statement. “Some house hunters are hanging out on the sidelines because they’re hopeful mortgage rates will come down soon.”
In some markets, listings surged well above the national average. Los Angeles saw a 23.5% jump in new listings, while Washington, D.C., recorded a 15.8% increase.
In LA, the influx may be tied to families displaced by the January wildfires, Redfin said, while in D.C., federal layoffs could be contributing to the trend.
Demand is weak as buyers retreat
Pending home sales were essentially flat in March while closed sales dipped about 1% on both a yearly and monthly basis. Existing-home sales fell 1.3% monthly and 0.4% annually, settling at a seasonally adjusted annual rate of 4.15 million.
Homes also lingered longer on the market. The median time to contract was 47 days — the slowest figure for any March since 2019.
High mortgage rates remain a major deterrent. The average 30-year fixed mortgage rate was 6.65% in March, more than double the averages seen during the pandemic-era homebuying boom.
“There’s a growing disconnect between what sellers think they can get for their homes and the direction the market is actually moving,” Redfin senior economist Elijah de la Campa said.
‘Tightening their belts’
Buyers are also contending with broader economic instability.
A recent Redfin-Ipsos survey found that 55% of U.S. adults are less likely to make a major purchase this year because of new tariff policies announced by President Donald Trump.
The policy includes a 10% baseline tariff on all imports and a 145% tariff on goods from China. The move has contributed to market volatility and heightened fears of a recession.
“Betting markets have the odds of a recession at higher than 50%, which is understandably making people wary of putting a big chunk of their money toward a house or a car,” said Chen Zhao, Redfin’s lead economist. “Consumers are tightening their belts because they are rightly nervous about their job security and the prospect of paying more for everyday expenses.”
According to Redfin, 24% of Americans have canceled plans for a major purchase, while 32% are delaying them. Younger adults ages 18 to 34 were more likely to accelerate purchases, with 23% saying tariffs made them more inclined to buy, compared to only 4% of those 55 and older.
Affordability crunch
The median monthly housing payment in the U.S. hit a record $2,819 this week, due to elevated mortgage rates and home prices. The affordability squeeze is pushing many would-be buyers out of the market, Redfin said.
One in five prospective buyers said they planned to sell stock to help fund a down payment, but stock market swings driven by tariff policies may upend these plans.
Some homeowners, meanwhile, are listing their properties in hopes of cashing out before the market cools further.
“Many people who bought homes in 2021 and 2022 are selling now, some of them because they can’t afford their property taxes and insurance payments,” said Alicia Grifaldo, a Redfin agent in Houston. “Because they bought at the peak of the market, they’re overpricing their homes to try to recoup their investment.”
The survey also revealed that 34% of Americans do not have an emergency fund to cover mortgage or rent payments in the event of a job loss or financial crisis. Renters are particularly vulnerable, with 53% reporting no such safety net, compared to 23% of homeowners.
Among those who do have emergency savings, 56% have six months or fewer in reserve. Only 12% of households with children have more than a year’s worth of housing expenses saved, compared to 29% of households without children.
Generational gaps are stark, with just 5% of people ages 18 to 34 having more than 12 months of housing payments saved. This compares to 27% of the 35-to-54 age bracket and 32% of those 55 and older.
Market in a holding pattern
While supply is climbing and price growth is slowing, the housing market remains on uncertain footing. Elevated borrowing costs, recession fears and global trade policy are keeping many would-be buyers and sellers on the sidelines.
“The buyers who are still active, typically those who need to move, are picky and unwilling to pay over asking price,” Martinez said. “And those buyers have the right strategy: Many of today’s sellers are willing to negotiate the price down.”
With both economic and political uncertainty looming large, Redfin said the coming months will be critical in determining whether the housing market continues to cool or finds its footing.