Existing home sales dropped in the latest reading, and the reasons are not mysterious.
Mortgage rates are still hovering near 7%, which means the monthly payment on a median-priced home has roughly doubled compared with just a few years ago.
Buyers are not walking away because they stopped wanting houses.
They are walking away because the math no longer works.
Sellers who locked in 3% loans during the pandemic do not want to trade that for a 7% loan on their next place.
So they stay put, and the number of homes for sale stays historically thin.
Fewer listings means fewer sales, even in markets where demand is decent.
First-time buyers feel it worst, since they have no existing home equity to roll over.
Many are stuck renting while rents climb, which makes saving for a down payment even harder.
Every stalled transaction ripples outward — fewer moving trucks, fewer furniture purchases, fewer contractors hired.
Housing has long been an engine of the broader economy, and it is currently idling.
For anyone trying to buy right now, the practical playbook has not changed much.
Get preapproved before you shop, because sellers will not take an offer seriously otherwise.
Shop credit unions and local banks alongside big lenders, since rate quotes can vary by half a percentage point or more on the same loan.
Origination charges, closing costs, and points can quietly add thousands to what you actually pay.
Ask for a full Loan Estimate and compare line by line.
If you already own a home with a low rate, the math on moving is genuinely hard.
Consider whether renting out the current place is realistic, or whether a smaller downsize is worth the higher rate.
Sometimes staying put and renovating is the cheaper path, even if it is not the exciting one.
Sellers, meanwhile, are learning that the pandemic-era bidding wars are over in most markets.
Overpricing now means a listing that sits, then gets cut, then gets ignored.
Homes that are priced realistically and show well are still moving.
The bigger picture is that this is not a crash.
It is a slowdown caused by affordability, and it will likely loosen only when rates come down meaningfully or incomes catch up.
Our take: the housing market is not broken, it is just brutally expensive to participate in.
If you are buying this year, treat the mortgage rate as the single most important number in your budget and shop it like you would a car.
Final Thoughts
Patience and comparison shopping are worth more right now than any prediction about where rates go next.