Lower mortgage rates aren’t pulling buyers off the sidelines — here’s what’s really holding back the spring housing market

Purchase mortgage applications were down 3% year-over-year for the week ending April 10, even as the 30-year fixed-rate mortgage fell to 6.3% — its lowest level in about a month. Lower borrowing costs and flat home prices should be enough to revive buyer interest, but they’re not. Pending home sales fell 4.1% year-over-year for the four-week period ending April 12, and home touring activity has barely budged: up just 11% since the start of the year, compared to a 40% increase during the same stretch in 2025. The 30-year fixed-rate mortgage averaged 6.3% this week, down from 6.37% the week before and significantly lower than 6.83% a year ago. Home price appreciation dropped 0.4% year-over-year in March, marking the second consecutive month of declining annual price growth, according to First American’s Home Price Index. Affordability is improving, but not perception. Consumer hesitation is driven by economic uncertainty, a slowing labor market, and declining consumer sentiment, outweighing the benefits of lower rates and flat prices.