STEVE INSKEEP, HOST:
This season of the year, spring, is typically the busiest time for the real estate market, but not this year. Here's NPR's Arezou Rezvani.
AREZOU REZVANI, BYLINE: If you stop by an open house these days, it may seem like the real estate market is back in full swing.
It's a Tuesday morning. I am here at an open house here in Los Angeles. Doors don't open for another 10 minutes. And already, there's a crowd of maybe 25 people here waiting to get in.
But there's much more going on here than meets the eye.
DAN: Come on in. The party's started. I'm Dan (ph).
UNIDENTIFIED PERSON #1: Hi.
REZVANI: Among the crowd touring this bright and airy fixer-upper perched in the hills are Maria and Jordan Rich (ph) with their newborn, Nico (ph), in tow. They're both at home these days on parental leave. And they're growing pretty desperate for more space.
MARIA RICH: We're now in a two-bedroom with two children - 3 and 5 weeks old - and a dog. And when he starts work again, he'll be working from home. So it'll be tight - tight, tight, tight.
REZVANI: For the last several months, they've been visiting open houses, getting a feel for what they think they can afford. And so far it's been...
M RICH: Depressing.
JORDAN RICH: (Laughter) Stressful.
REZVANI: With mortgage rates climbing rapidly from 5% to 6%, even 7%, all within a year, the Riches feel stuck on the sidelines of the real estate market.
M RICH: When you think you're getting closer, then the interest rates go up. And then you're thrown for a loop. And then you feel like you're miles away again, right?
J RICH: Yeah. Everything's just changing so fast that it's, like, hard to even, like, do research ahead of time because by the time you gather that research, things have changed again.
REZVANI: But interest rates are just half the battle for first-time homebuyers.
LAWRENCE YUN: Right now we are in a very tight inventory situation.
REZVANI: That's Lawrence Yun, chief economist with the National Association of Realtors. He says that while buyers have pulled back over interest rate hikes, sellers across the country have also retreated for the same reason.
YUN: Many homeowners who have refinanced into those low rates, or people who have purchased in the past few years at 3% mortgage rate, they are loving their 3% and unwilling to give that up.
REZVANI: And that means far fewer houses are on the market this spring for families like the Riches to consider at all. The few that do get listed, they go on to command top dollar, giving the impression that the market is hot, when in reality, it's been much slower than in years past.
YUN: The housing market is currently in paralysis. We are not getting that huge spring buying, normal activity.
REZVANI: Home sales are down roughly 20% compared to recent years. But within that slump, the competition remains fierce.
(SOUNDBITE OF BELL CHIMING)
UNIDENTIFIED PERSON #2: Thank you.
UNIDENTIFIED PERSON #3: All right. Nice to meet you.
REZVANI: That open house Jordan and Maria Rich visited, it attracted more than 300 visitors on its first day of showing and has multiple offers. They're starting to wonder if maybe it's time to start looking farther afield.
M RICH: I don't know. I mean, we talk about that every day, if it's worth staying in Los Angeles where we're very happy, or if we should move somewhere cheaper where we could have a big house and good schools and...
REZVANI: And a much more affordable mortgage.
Arezou Rezvani, NPR News, Los Angeles.
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