There’s good news and bad news from the housing market today.

The good news: Mortgage rates dipped a bit, and sellers are finally selling. That’s helping with the housing shortage. Housing inventory is 19% higher than it was a year ago, according to Zillow’s new Housing Market Report.

The bad news: Buyers still aren’t buying.

A lot of sellers hadn’t been selling because of what’s known as the “lock-in effect.”

“Homeowners have very low interest rate. We have heard that they did not want to give that up,” said Lawrence Yun with the National Association of Realtors.

He said the march of time still brings retirements, divorces, kids moving out, and other reasons to sell anyway.

“Life-changing events means people have to sell their home, even if they have to give up their low interest rate,” said Yun.

Listings are up 9% compared to last year, but sales have barely budged. 

That’s partly down to tariff-induced economic uncertainty, said Timothy Savage at New York University’s Schack Institute of Real Estate

“Until potential buyers have some clarity about what's going on in Washington, [they] will sit on the sidelines,” he said. “Quite frankly, I would.”

The other reason is simple: Potential buyers still can’t afford a new house, said Lance Lambert, co-founder of the housing analytics company ResiClub.

“We had this period during the pandemic housing boom where home prices went up 40%, 50% nationally,” said Lambert.

He said sure, mortgage rates have dipped a bit, but when you look at housing prices through the lens of how much people are earning, “this is one of the worst periods the past two years for housing affordability in almost four decades.”

Lambert said housing affordability is at least no longer getting worse, but getting it back to pre-pandemic normal will take years.