Residential properties in Colorado Springs, Colorado, are pictured in March 2023, as existing home sales in the city faced a significant decline in sales for the month. According to real estate experts, the housing market in the area has been struggling due to the impact of high mortgage rates.

The decrease in home sales was unexpected, given the anticipation of a busier spring season in the real estate market. Experts attribute the decline to the continuous sluggishness of the housing market, exacerbated by the rising mortgage rates felt in recent weeks.

Mortgage rates have seen a notable increase, reaching an average of 6.81% for a 30-year fixed-rate mortgage. This spike has been attributed to uncertainties in the market caused by threats of tariffs imposed by President Trump, affecting the bond markets that influence mortgage rates.

Additionally, while home prices are still on the rise, the pace of growth has slowed down compared to previous months. The median sales price of existing homes in March was $403,700, reflecting a continual increase in home values.

Looking ahead, experts predict a stagnant market, with home sales likely to remain flat at best. The correlation between mortgage rates and existing home sales has remained closely tied over the years, suggesting that market conditions will continue to influence buying patterns.

The housing market’s slowdown could signal broader economic implications, such as decreased economic mobility for individuals. With fewer people trading up to higher-priced homes, there is a growing concern about the lack of upward mobility within the housing sector.

Despite the challenges faced by the existing home market, new home sales have shown a more positive trajectory. The sales of new single-family homes have increased, offering a potential outlet for buyers who have been priced out of the existing home market.

Overall, indicators point to a subdued spring market, with mortgage applications seeing a significant decline in recent weeks. With potential borrowers waiting on the sidelines to gauge economic conditions, the real estate market in Colorado Springs is poised for a period of uncertainty in the coming months.