As 2025 began, the stars were aligning for a housing market rebound.

Inflation was easing, the economy looked strong and mortgage rates were drifting downward. By April, there were more available homes to buy than at any time since January 2020, according to the Federal Reserve of St. Louis. The conditions were ripe for buyers to re-emerge, checkbooks in hands, and sellers to negotiate.

Then on April 2, President Trump rolled out his expansive global trade tariffs, shocking the stock and bond markets and sparking fears of a recession. Mortgage rates jumped again, hitting 6.89 percent for a 30-year fixed-rate loan on May 29, their highest level since early February. The extreme volatility threw cold water on a fragile market. Buyers bailed out.

“There isn’t any urgency to buying right now — if anything it feels more risky to put a down payment into a home when you might not have a job six months from now,” said Daryl Fairweather, the chief economist of Redfin.

Real estate agents across the country report a chilled environment, with sellers unwilling to lower their prices and buyers reluctant to make a big purchase as the economy flounders and the costs for a mortgage, insurance and property taxes rise. Even in markets where prices have fallen and inventory is piling up, like Austin, Texas, homes are sitting on the market for months. In fiercely competitive areas, like the New York City suburbs, where prices are still rising and homes sell fast, properties that would have gotten a dozen offers a year ago now get two or three.

“Yes, there is more inventory, but it’s almost like too little too late,” said Selma Hepp, the chief economist for Cotality, a real estate data provider.