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Why Buyers Are Backing Off Even As Rates Stay Low

The U.S. housing market is feeling the chill. Despite stable mortgage rates, more and more homebuyers are hitting the pause button. The reason? Ongoing trade tensions between the United States and major global partners, especially China, are shaking consumer confidence.

While mortgage rates are holding firm, the fear of economic slowdown caused by the trade war is enough to make many potential buyers wait and watch. This comes at a time when real estate experts expected low interest rates to boost home sales.

So, why are people holding back, and what does this mean for the real estate market in the months ahead?

Trade War Clouds Over Consumer Confidence

The current trade dispute has impacted multiple industries, but its effect on the housing market is particularly notable. Buyers, especially first-timers, are growing concerned about future job security and rising prices of essential goods. As tariffs affect the cost of imported materials, fears of inflation and economic instability are pushing many to delay big financial commitments.

According to a recent Freddie Mac report, 30-year fixed mortgage rates are holding steady at around 6.9%. While this is significantly higher than pandemic-era rates, it’s still within reach for many. However, stable rates aren’t enough to override broader economic worries.

“People aren’t confident about what the economy will look like a year from now,” says housing analyst Dana Raines. “Even if they qualify for a loan today, they worry about their ability to keep up with payments if the job market weakens.”

Mortgage Rates Remain Calm in the Storm

Despite the economic uncertainty, mortgage rates have shown little movement in recent weeks. According to Bankrate, the national average for a 30-year fixed mortgage remains nearly unchanged from last month.

Typically, such stability would encourage more buyers to lock in a rate. But experts say that it’s not just about affordability anymore—it’s about fear.

“Rate stability is good news, but it’s not the only thing buyers look at,” says economist Rachel Moore from the National Association of Realtors. “They also consider economic outlook, inflation, and job growth—all of which are tied to the ongoing trade war.”

Inventory Grows, But Demand Slows

With more buyers stepping away, sellers are beginning to feel the pressure. Inventory levels in several major metro areas, including Dallas, San Francisco, and Chicago, have ticked upward. Homes are spending more time on the market, and bidding wars are becoming less common.

In fact, Redfin recently reported that the number of homes with price cuts increased by 4.3% last month. That’s a clear sign that sellers are trying to attract hesitant buyers.

“It’s a buyer’s market in many places now,” Moore adds. “But ironically, buyers are still scared to make a move.”

Builders and Developers Also Feeling the Pinch

Homebuilders are slowing down their projects amid the slowdown in buyer demand. The National Association of Home Builders (NAHB) noted a slight dip in construction activity this quarter. Rising costs of materials due to tariffs, combined with reduced demand, are making developers nervous.

“Trade tariffs on imported lumber and steel have already increased costs,” says NAHB spokesperson Matt Johnson. “If buyers don’t return soon, we might see fewer new housing starts by the end of the year.”

Real Estate Agents Shifting Strategies

With fewer buyers actively shopping for homes, real estate agents are adapting their approach. Many are offering virtual tours, price flexibility, and incentives such as closing cost coverage to entice serious buyers.

“We’re seeing more creative sales strategies,” says realtor Angela Rivers from Atlanta. “Some sellers are even open to rent-to-own deals just to keep the interest going.”

Still, most agents agree that confidence—not pricing—is the real issue.

What This Means for You

If you’re thinking of buying a home, now might be a good time to shop around—but only if your personal finances are solid. With rates steady and sellers more flexible, buyers with job security may find great deals.

On the other hand, if you’re uncertain about your job or the economy, it’s okay to wait. Experts recommend keeping an eye on rate trends and trade negotiations before making a major financial decision.

What’s Next for the Housing Market?

Economists expect mortgage rates to stay stable or slightly decline in the coming months, especially if the Federal Reserve holds off on rate hikes. However, much depends on how the trade war evolves.

“If trade tensions ease, we could see buyer confidence return quickly,” says Raines. “But if the conflict continues or worsens, the housing market might stay cold well into next year.”

Final Thoughts

The U.S. housing market is at a crossroads. Low and stable mortgage rates should be good news for buyers. But amid the uncertainty of a global trade war, confidence has become the missing piece.

Until political and economic tensions settle, both buyers and sellers are likely to remain cautious. For now, the market waits—and so do the people.