According to Freddie Mac, the average rate on popular 30-year fixed-rate mortgages nationwide was 6.42 per cent for the week ending March 23. This was down from last week - the lowest level in over a month.

This is a small reprieve and a much-needed break for homebuyers, but don't expect it to last. When the Federal Reserve raises interest rates, mortgage rates usually rise with it.

"Economic conditions will keep upward pressure on interest rates," notes Sabrina Speianu, economic data manager at Realtor.com®, in her recent analysis. This "will continue to pose affordability challenges for buyers and could leave some sellers locked into lower rates waiting on the sidelines."

In this edition of "How's the housing market this week?" we take a look at the stalemate in the housing market, what it will take to move it along and what it all means for homebuyers and sellers.

While housing prices are still gradually rising, they have started to level off.

For the week ending March 18, listing prices were 6.3 per cent higher than this week a year ago.

"This is still the lowest sales price growth rate since June 2020," Speianu explained. In addition, interest rates are "expected to remain high in the near term, meaning that home prices are likely to continue to soften this spring season."

Another factor to keep in mind is that list prices are only what sellers want to get. While that ideal price hovered at a high of $415,000 in February, the actual sales price of a home - in other words, what buyers and sellers agree on after bargaining - could be much lower.

According to the National Association of Realtors, this price has fallen by 0.2 per cent a year, the first such decline in 11 years.

The drop in home prices is good news for buyers, but sellers are understandably upset - as evidenced by the decline in the number of new homes on the market.

Each week for the past nine months, fewer homes have been listed for sale than a year ago, and the week ending March 18 was no exception. The weekly figures show 20 per cent fewer new listings than at this time in 2022.

"In addition, sentiment towards housing - particularly sales sentiment - deteriorated in February as fewer consumers expect home prices to rise over the next year," Speianu noted." This sluggish consumer sentiment and increased economic uncertainty could mean that fewer homeowners decide to sell during the spring buying season compared to last year."

This may come as a surprise to many frustrated potential homebuyers, but in reality, there are more homes available for sale out there now than there will be in 2022. In fact, the total housing inventory (both new and older homes) is up 59 per cent compared to a year ago.

But those listings have been languishing on the market for an average of 18 days longer than they did a year ago.

If you look at the big picture, inventory may be up from a year ago, but it is down (well below) compared to the pre-pandemic period when there were 50% of homes on the market.

However, as the weather turns warmer, home buyers and sellers are looking to come out of hibernation. In fact, the best time to sell in 2023 will be the third week of April, when listings will be viewed 16 per cent more than usual and at $8,400 more per sale.

"So far, the usual seasonal pick-up in the pace of home sales this spring is continuing as we approach the best time to sell a home (usually in April)," predicts Spianu.

Taken together, this rosy outlook hinges on what mortgage rates do next.

In other words, homebuyers: hurry.