The Federal Reserve has a new chair, but mortgage rates moved in the wrong direction this week. Even so, a review of the spring housing market reveals genuine green shoots—and a clear lesson for sellers about what actually moves homes.

The Big Picture

Kevin Warsh was sworn in as Federal Reserve chair this week. As Realtor.com® senior economist Jake Krimmel notes, the economic landscape has shifted considerably since his nomination. Middle East–driven inflation has all but removed near-term rate cuts from the table, potentially creating tension with the White House. That tension may prove constructive: It gives Warsh an early opportunity to demonstrate the Fed's independence, which is ultimately one of the best paths to lower mortgage rates over time.

Mortgage rates jumped 15 basis points this week to 6.51%, reflecting elevated April inflation data and the lack of progress toward a Middle East resolution. Even so, rates remain 35 basis points below this time last year—lower than any other mid-May since 2022. Not where buyers hoped, but not at recent highs either. The Realtor.com Market Clock shows a balanced market, yet home sales remain relatively low. As Memorial Day weekend kicks off the unofficial start of summer, we examined the spring market and found genuine green shoots in new listings and contract signings.

“"In markets where asking prices are starting lower, we’re seeing fewer additional price cuts and more contract signings."”