Republican lawmakers are dismissing the sluggish spring housing market, in which mortgage rates have climbed and home sales have slowed, as temporary.
The market was predicted to start bouncing back after inflation fell to its lowest point in several months in January and mortgage rates dropped below 6% for the first time since 2022. But real estate experts’ expectations for a recovery year have begun to fall off as a result of President Donald Trump’s war in Iran.
Congressional Republicans say this is short-term.
“The stock market continues to go up, which tells me investors see a short-term engagement in Iran,” Rep. Mike Flood of Nebraska told NOTUS. “Listen, our mortgage rates are tied to the Treasury, and the president, and Republicans in Congress are doing what we can to put more money in the pockets of Americans.”
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Republicans say Trump has been focused on economic recovery and that his administration sees addressing the housing crisis as part of the broader effort to deliver on an affordability agenda. That’s key to congressional Republicans’ platform ahead of this year’s midterms, especially given how front-of-mind it is for many Americans.
“I don’t think the war has anything to do with it,” Rep. Dan Meuser of Pennsylvania told NOTUS of mortgage rates increasing and the market slowing. “I mean, we had a housing issue well before the war. The war has definitely taken us off our economic growth path, not a lot, because of the [reconciliation package] and other measures, lower taxes, less regulations, more energy production.”
Mortgage rates are tied to the bond market, but in light of market instability because of the war and higher inflation rates, the price of borrowing has increased. That affects both the buying and selling ends of the real estate market, especially as many homeowners are eager to hang on to low mortgage rates they locked in during the pandemic.
“I am hopeful and believe that that will come to a conclusion soon, and we’ll work to make sure that we drive down costs for Americans, for Alabamians, in every way. So we’re gonna, we’re gonna keep working,” Sen. Katie Britt told NOTUS.
Some Republicans conceded the war is having some effect on the housing market.
“The events of the last six weeks in Iran play an impact, but that’s not what is causing the housing crisis,” Rep. Zach Nunn of Iowa told NOTUS. “I think that we should be optimistic about what we saw at the beginning of January and [the market] fully has the opportunity to turn back on for this summer and help people buy and sell homes.”
For people in the housing market now, though, they acknowledge that it is not doing as well as anticipated.
“It’d be very difficult to do,” Sen. Thom Tillis told NOTUS of buying and selling.
“You’ve also got to have the right economic fundamentals in place to accomplish that. And we’re not there yet. Interest rates will go down when it makes sense, and I think the Fed will follow the dual mandate to make that happen,” Tillis said.
As of Thursday, the average 30-year fixed mortgage rate stood at 6.3%, though rates climbed for five consecutive weeks reaching their highest point this year at the beginning of April, at 6.46%, according to Freddie Mac. They have since slightly eased off.
In March, existing home sales fell below a 4 million seasonally adjusted annual rate, according to the National Association of Realtors.
Sen. Bernie Moreno said he thinks “the hostilities in Iran will end very quickly” and noted the stock market set new records last week. “I think oil prices will come down as quickly as they went up, and I think in the next very short period of time, all that will reestablish,” Sen. Bernie Moreno told NOTUS.
“By summer, things will be really, really good,” Moreno said. “We’ll be cooking.”
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