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Home listings are rising, but buyers aren’t buying due to high interest rates

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Home listings rose by the largest amount in three years.  (iStock)

Home listings were up by 13% year over year at the end of February, according to a report from Redfin. This is the largest increase in three years.

The total inventory on the market is also holding steady. This is the first time in about nine months that the number of homes on the market hasn’t declined.

While home listings are up, so are home prices. Housing prices are still historically high, the Zillow report found. The average mortgage payment is $2,671, close to last October’s record high.

These high costs have lowered pending sales by 8%, which is the greatest decline in five months. So, while listings are up, purchases are down as buyers struggle to deal with high housing costs and record-high homeowners insurance costs.

Even though purchases are down, buyers are still looking at homes. Redfin measures the requests it gets for tours and other homebuying services through its Homebuyer Demand Index. The Index is up by 10% from a month ago and at its highest point since September.

“House hunters are out there, and competition picks up every time mortgage rates decline a bit,” said Brynn Rea, a Redfin Premier agent in Spokane, Washington.

“I’m telling buyers who can afford it to look now while they have more breathing room and less competition,” Rea said. “They have a good chance of negotiating the price down or getting some concessions from the seller, which could make up for getting a 7% mortgage rate instead of 6%.”

If you think you’re ready to buy a home, consider using Credible to help you easily compare mortgage loan interest rates from multiple lenders at once.

HOMEBUYERS CONSIDERING PURCHASING TINY HOMES AND FIXER-UPPERS TO COMBAT HIGH HOME PRICES

Mortgage rates hover near 7%

Buyers are weary of buying, in large part due to mortgage rates rising. Rates haven’t continued dropping as the Federal Reserve and housing experts signaled they might at the end of last year. At the end of February, 30-year fixed-rate mortgages averaged 6.94%, marking the fourth week in a row rates increased, according to Freddie Mac.

While 15-year mortgages fared slightly better, dropping to an average of 6.29%, this is still higher than when rates averaged 5.89% last year.

“The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying,” Freddie Mac Chief Economist Sam Khater said. “While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines.”

Although interest rates are high, they’re not as high as they have been in the last few years. If you want to lower your monthly payment, consider refinance now. Use Credible’s free online tool to browse different mortgage refinance lenders and see what your loan options are.

15% OF AMERICANS HAVE CO-PURCHASED A HOME WITH A NON-ROMANTIC PARTNER, EVEN MORE WOULD CONSIDER IT

Home sellers’ profits are trending down

No one is making out in this turbulent housing market. Buyers are struggling to find affordable homes, but sellers are also making less on the sale of their properties.

In 2023, sellers made about $121,000 in profit, on average, decreasing from $122,600 in 2022, according to an ATTOM report. Although 2023’s profits were generally high, it was the first year they decreased since 2011 when the market recovered from the 2008 recession.

“Last year certainly stood out as another very good year for home sellers across most of the United States. Typical profits of over $120,000 and margins close to 60 percent were still more than double where they stood just five years earlier,” ATTOM CEO Rob Barber said.

Interest rates and other high housing-related costs aren’t helping seller profits look up for 2024.

“In 2024, the stage seems set for more small changes in prices as well as seller gains given the competing forces of interest rates that have headed back down in recent months and home supplies that remain tight, but homeownership costs that remain a serious financial burden for many households,” Barber said.

If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes, all without hurting your credit score.

1 IN 5 HOMEOWNERS THINKING OF SELLING IN THE NEAR FUTURE: ZILLOW

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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Tariffs may raise much less than White House projects, economists say

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President Donald Trump speaks before signing executive orders in the Oval Office on March 6, 2025.

Alex Wong | Getty Images

President Donald Trump says that tariffs will make the U.S. “rich.” But those riches will likely be far less than the White House expects, economists said.

The ultimate sum could have big ramifications for the U.S. economy, the nation’s debt and legislative negotiations over a tax-cut package, economists said.

White House trade adviser Peter Navarro on Sunday estimated tariffs would raise about $600 billion a year and $6 trillion over a decade. Auto tariffs would add another $100 billion a year, he said on “Fox News Sunday.”

Navarro made the projection as the U.S. plans to announce more tariffs against U.S. trading partners on Wednesday.

Economists expect the Trump administration’s tariff policy would generate a much lower amount of revenue than Navarro claims. Some project the total revenue would be less than half.

Roughly $600 billion to $700 billion a year “is not even in the realm of possibility,” said Mark Zandi, chief economist at Moody’s. “If you get to $100 billion to $200 billion, you’ll be pretty lucky.”

The White House declined to respond to a request for comment from CNBC about tariff revenue.

The ‘mental math’ behind tariff revenue

There are big question marks over the scope of the tariffs, including details like amount, duration, and products and countries affected — all of which have a significant bearing on the revenue total.

The White House is considering a 20% tariff on most imports, The Washington Post reported on Tuesday. President Trump floated this idea on the campaign trail. The Trump administration may ultimately opt for a different policy, like country-by-country tariffs based on each nation’s respective trade and non-trade barriers.

But a 20% tariff rate seems to align with Navarro’s revenue projections, economists said.

The U.S. imported about $3.3 trillion of goods in 2024. Applying a 20% tariff rate to all these imports would yield about $660 billion of annual revenue.

“That is almost certainly the mental math Peter Navarro is doing — and that mental math skips some crucial steps,” said Ernie Tedeschi, director of economics at the Yale Budget Lab and former chief economist at the White House Council of Economic Advisers during the Biden administration.

Trade advisor to U.S. President Donald Trump Peter Navarro speaks to press outside of the White House on March 12, 2025 in Washington, DC. 

Kayla Bartkowski | Getty Images

That’s because an accurate revenue estimate must account for the many economic impacts of tariffs in the U.S. and around the world, economists said. Those effects combine to reduce revenue, they said.

A 20% broad tariff would raise about $250 billion a year (or $2.5 trillion over a decade) when taking those effects into account, according to Tedeschi, citing a Yale Budget Lab analysis published Monday.  

There are ways to raise larger sums — but they would involve higher tariff rates, economists said. For example, a 50% across-the-board tariff would raise about $780 billion per year, according to economists at the Peterson Institute for International Economics.

Even that is an optimistic assessment: It doesn’t account for lower U.S. economic growth due to retaliation or the negative growth effects from the tariffs themselves, they wrote.

Why revenue would be lower than expected

Tariffs generally raise prices for consumers. A 20% broad tariff would cost the average consumer $3,400 to $4,200 a year, according to the Yale Budget Lab.

Consumers would naturally buy fewer imported goods if they cost more, economists said. Lower demand means fewer imports and less tariff revenue from those imports, they said.

Tariffs are also expected to trigger “reduced economic activity,” said Robert McClelland, senior fellow at the Urban-Brookings Tax Policy Center.

More from Personal Finance:
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For example, U.S. companies that don’t pass tariff costs on to consumers via higher prices would likely see profits suffer (and their income taxes fall), economists said. Consumers might pull back on spending, further denting company profits and tax revenues, economists said. Companies that take a financial hit might lay off workers, they said.

Foreign nations are also expected to retaliate with their own tariffs on U.S. products, which would hurt companies that export products abroad. Other nations may experience an economic downturn, further reducing demand for U.S. products.

Tariffs could be a major rewiring of the domestic and global economy, says Mohamed El-Erian

“If you get a 20% tariff rate, you’re going to get a rip-roaring recession, and that will undermine your fiscal situation,” Zandi said.

There’s also likely to be a certain level of non-compliance with tariff policy, and carve-outs for certain countries, industries or products, economists said. For instance, when the White House levied tariffs on China in February, it indefinitely exempted “de minimis” imports valued at $800 or less.

The Trump administration might also funnel some tariff revenue to paying certain parties aggrieved by a trade war, economists said.

President Trump did that in his first term: The government sent $61 billion in “relief” payments to American farmers who faced retaliatory tariffs, which was nearly all (92%) of the tariff revenue on Chinese goods from 2018 to 2020, according to the Council on Foreign Relations.

The tariffs will also likely have a short life span, diluting their potential revenue impact, economists said. They’re being issued by executive order and could be undone easily, whether by President Trump or a future president, they said.

“There’s zero probability these tariffs will last for 10 years,” Zandi said. “If they last until next year I’d be very surprised.”

Why this matters

The Trump administration has signaled that tariffs “will be one of the top-tier ways they’ll try to offset the cost” of passing a package of tax cuts, Tedeschi said.

Extending a 2017 tax cut law signed by President Trump would cost $4.5 trillion over a decade, according to the Tax Foundation. Trump has also called for other tax breaks like no taxes on tips, overtime pay or Social Security benefits, and a tax deduction for auto loan interest for American made cars.

If tariffs don’t cover the full cost of such a package, then Republican lawmakers would have to find cuts elsewhere or increase the nation’s debt, economists said.

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Investors hope April 2 could bring some tariff clarity and relief. That may not happen

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Cliff Asness’s AQR multi-strategy hedge fund returns 9% in the first quarter during tough conditions

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Cliff Asness.

Chris Goodney | Bloomberg | Getty Images

AQR Capital Management’s multistrategy hedge fund beat the market with a 9% rally in the first quarter as Wall Street grappled with extreme volatility amid President Donald Trump’s uncertain tariff policy.

The Apex strategy from Cliff Asness’ firm, which combines stocks, macro and arbitrage trades and has $3 billion in assets under management, gained 3.4% in March, boosting its first-quarter performance, according to a person familiar with AQR’s returns who asked to be anonymous as the information is private.

AQR’s Delphi Long-Short Equity Strategy gained 9.7% in the first quarter, while its alternative trend-following offering Helix returned 3%, the person said.

AQR, whose assets under management reached $128 billion at the end of March, declined to comment.

The stock market just wrapped up a tumultuous quarter as Trump’s aggressive tariffs raised concerns about an severe economic slowdown and a re-acceleration of inflation. The S&P 500 dipped into correction territory in March after hitting a record in February.

For the quarter, the equity benchmark was down 4.6%, snapping a five-quarter win streak. The tech-heavy Nasdaq Composite lost 10.4% in the quarter, which would mark its biggest quarterly pullback since a 22.4% plunge in the second quarter of 2022.

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