Some Markets Thawing in Time for Spring Homebuying Season

Why It Matters

Stronger buying power offsets higher rates, but uneven regional affordability will shape sales velocity, lender risk and builder inventory decisions this spring.

Key Takeaways

• Buying power up 10% versus last year’s list prices.
• 30‑year mortgage hit 5.98% then rose 40 bps.
• San Francisco gap narrowed to –1.3%, closest to pre‑pandemic.
• Hartford affordability gap plummets to –74.4%, worst market.
• National price index up 0.9% YoY, slowing growth.

Pulse Analysis

The latest First American analysis reveals that, despite a 40‑basis‑point surge in 30‑year mortgage rates after March’s Treasury volatility, U.S. buyers are better positioned than a year ago. Nationwide buying power now exceeds median list prices by roughly 10%, a milestone not seen since 2022. This improvement stems from modest price moderation and a slight easing of supply constraints, which together cushion the impact of higher financing costs on prospective homeowners.

Regional dynamics tell a more nuanced story. Coastal and Sun Belt metros such as San Francisco, San Jose, Miami, Kansas City and Denver have seen the affordability gap shrink to near‑pre‑pandemic levels, positioning them for a potential spring sales uptick. Conversely, markets like Hartford, Philadelphia and Pittsburgh remain entrenched in a deep affordability freeze, with gaps exceeding 40% and buying power actually declining. These disparities will likely drive divergent inventory strategies, as sellers in thawing markets may price more aggressively while those in frozen zones could face prolonged listing periods.

For lenders, builders and investors, the uneven landscape underscores the need for localized risk assessment. While the national narrative points to a resilient spring market, pockets of strain could temper overall transaction volumes and influence loan‑to‑value standards. Policymakers monitoring housing stability may also focus on the outlier markets where affordability gaps threaten longer‑term market health. Anticipating where the thaw will accelerate versus where it will lag will be critical for capital allocation and pricing decisions throughout the season.