Buying a house is getting harder. Blame homeowners who refuse to move.

• This spring, homebuyer demand is increasing and houses are selling faster. It would seem promising.
• But buyers won't have many homes to pick from, which can lead to competition that keeps prices high.

Mortgage rates have been declining, but that won't make buying a home any easier this spring.

The average US fixed interest rate for a 30-year mortgage fell to 6.42% last week.

While it's well above the 4.42% borrowers were offered during the same period in 2022, it's below the near 7% levels that chilled the market at the beginning of March. Considering growing expectations that the Federal Reserve will stop, or even reverse, its benchmark rate hikes this year, mortgage rates may fall further in the weeks to come.

Lower rates have already translated to renewed interest from prospective buyers — but they've created a Catch-22 scenario for the US real estate market.

The crux of the issue is that there are still not enough homes available for sale.

Owners happy with their homes and low, locked-in mortgage rates, aren't moving much. New supply is still lagging demand, with the gap between single-family home constructions and the number of households formed growing to 6.5 million homes in 2022, according to Realtor.com.

With inventory so thin, the few homes that are on the market are selling quickly.

The cocktail of heightened demand and limited supply means that homebuying could become more competitive this spring.

"Because there's so little to choose from, homebuying speed is picking up even while rates stay high and demand remains low compared with last year," Dana Anderson, a data analyst with Redfin, wrote in a March housing report. "Nearly half of homes that went under contract had an accepted offer within two weeks of hitting the market, the highest share since June."

Take a tiny one-bedroom cottage in the middle of Connecticut, which attracted 300 people to an open house in March — precisely because the options for sale in the area were so paltry.

Megan Hicks, an agent with Austin, Texas-based NextGen Real Estate Properties, told Insider that while competition has yet to return to levels seen in 2020 and 2021, homebuyers are nonetheless facing difficulties.

"There's not as many bidding wars as there were, but there is still competition because the supply is low," Hicks said.

Despite an increase in February, the city still only had 2.6 months of housing supply by month's end, according to the Austin Board of Realtors. That is well below the 5 to 6 months of supply that experts consider healthy for a housing market.

More competition, or demand, for a smaller number of homes, or supply, usually keeps prices high. Home prices in Austin, however, actually dropped 12.2% year-over-year in February. It's a sign that in hot pandemic housing markets, where prices skyrocketed the most since the summer of 2020, buyers may see prices fall — though they'll still hover well above prepandemic levels.

It's partly an American problem: In other countries, where many buyers have mortgages with terms shorter than 30 years, home prices are falling at faster rates.

Because finding a home in the US is as hard as ever, Hicks suggested that buyers have all their ducks in a row in order to compete for a home this spring.

"You do need to have your preapproval ready," she said. "You also need to have a really solid idea of what you need in a house, and when it shows up on the market, you need to be quick to move on it."