Why Realtors Are Worried About The Iran War

The spring housing market is experiencing a significant shift due to the war with Iran, which has impacted the US economy and buyer demand. Mortgage rates are higher than anticipated, and concerns about employment and inflation are prominent. A CNBC Housing Market survey indicates that buyers are more worried about the economy and mortgage rates than home prices. Only 9% of agents reported buyers being most concerned about home prices, a decrease from 18% in the previous quarter, despite nearly twice as many agents reporting rising home prices in Q1. Mortgage rates jumped from 5.99% to around 6.6%, contributing to buyer apprehension about the economy, gas prices, and job security. Affordability issues are leading more buyers to exit the market, with 19% of agents reporting this trend, up from 11% last year. Over half of agents also reported contract cancellations, as buyers on the fence are now opting not to buy. As buyer demand falls, homes are staying on the market longer, with 31% of agents reporting listings on the market for over six weeks, up from 26% in Q4. Some sellers are unwilling to lower prices, leading to properties being pulled off the market. Sellers are increasingly concerned about wait times, though fewer agents reported price cuts, possibly due to a brief drop in mortgage rates below 6% mid-quarter. Despite economic and interest rate concerns, agents in Q1 still described the market as a buyer's market or balanced, though the buyer's market share decreased. Some sellers are delaying listings, opting to wait for the fall. While just over half of agents expect market improvement, this share is significantly lower than last year, with more expecting the market to remain stable, a notable shift from the typically busy spring season.