In March, the national median real estate listing price was $424,000, down from an all-time high of $449,000 in June.

While prices this March are 6.3% higher than March 2022, this price growth is waning, marking "the lowest growth rate since June 2020, in the early months of the COVID-19 pandemic," noted Danielle Hale, chief economist at Realtor.com®, in her analysis.

She even predicted that "at this slower pace, listing prices could fall by the summer relative to the previous year."

Take a closer look at the softening of house prices in the spring.

Given that house prices have been running hard and high throughout the pandemic, why are they showing signs of losing momentum in the run-up to the spring home-buying season?

One obvious culprit is mortgage rates, which have more than doubled in the past year - from under 3% to well over 6% on 30-year fixed-rate loans. In monthly mortgage payments, it costs an average of $611 (or 39.3%) more to finance 80% of a typical home today compared to last year.

This has severely impacted home buyers' affordability - and, in turn, has forced sellers to lower their expectations and asking prices. As Hale puts it, home sellers have "gradually adapted to softer market conditions".

Many sellers have conceded, albeit grudgingly, their disappointment at missing the peak of the market.

"While it's technically a sellers' market, not a buyers' market, it doesn't really feel that way to sellers," says Brian Davis, who teaches a real estate investment course at SparkRental." Many sellers just aren't getting the homes they want right now."

Sellers have three options in the face of a relatively lacklustre spring season.

"Some will simply take their listings off the market," Davis says. And that's exactly what many are doing. in March, the number of new listings on the market was down 20.1 per cent compared to the same month last year.

As for those sellers who are still in the game, there are still two tough choices to make.

"Some will lower their prices to attract offers," says Davis.

Indeed, 12.6 per cent of home sellers made price reductions in March. That's more than double the number of people who cut their asking price (5.8 per cent) in the same month last year.

As for the third group, "patient sellers can simply list their home at the price they want and wait," says Davies." But they can end up waiting a long time."

And the numbers bear that out. in March, real estate listings stayed on the market for an average of 54 days, 18 days longer than last year.

"This stagnation suggests to me that, at least in some markets, home prices have declined further," Davis said, adding that he thinks the outlook is grim regardless of what happens next in the economy.

"The only reason the Fed is cutting rates this year is because they need to stimulate growth if there's a recession," he said." That puts sellers between the rock of high interest rates and the hard ground of a recession - both of which have historically depressed house prices."