High Mortgage Rates Are Causing Many St. Louis Homebuyers to Delay Their Purchase

If you’re thinking about buying a home in St. Louis, you’re not alone—and you’re not imagining things. The housing market has hit a bit of a pause button lately, and one of the biggest reasons is higher mortgage rates.

This morning, the National Association of Realtors (NAR) released data showing that pending home sales in April dropped by 6.3% compared to March. Even more telling, they were 2.5% lower than April of last year. So, for anyone hoping that 2025 would bring a rebound in real estate activity, these numbers are a clear signal that higher interest rates are still keeping many buyers on the sidelines.

Why Are St. Louis Homebuyers Waiting?

Mortgage rates today may not be historically high, but compared to just a few years ago, they’re significantly elevated. After ticking up again in April—following a brief dip in February and March—rates have slowed what is typically the busiest season for homebuying.

As a result, we expect existing home sales to remain soft in the months ahead. There might be a small bump in May (thanks to those lower rates earlier in the year), but overall, the trend has been downward.

At Carlson Mortgage, a top-rated St. Louis mortgage broker, we’ve seen firsthand how sensitive local homebuyers are to interest rates. Even a small increase can have a big impact on your monthly payment—and your ability to qualify for the home you want.

It’s Not Just Prices—It’s the Rates

Yes, home prices are still relatively high. But when it comes to affordability, mortgage rates are having a far greater impact.

In fact, according to NAR chief economist Lawrence Yun, “At this critical stage of the housing market, it is all about mortgage rates.” We tend to agree.

Here’s why: A 1% drop in mortgage rates has roughly the same effect on affordability as an 11% drop in home prices. So while prices might come down slightly, a meaningful decrease in interest rates will have a much bigger impact on your purchasing power.

This is also why many homebuilders offer rate buydown programs. It’s simply more effective than cutting home prices—and makes homes more affordable for the average buyer.

At Carlson Mortgage, we work with a wide range of lenders across Missouri, so we’re able to shop around for the lowest mortgage rates without being tied to any specific bank. And unlike many brokers, we never charge any broker fees, processing fees, or points. That’s a big deal when every dollar counts.

Younger Buyers Are Most Affected

According to a May 2025 survey by Realtor.com, high mortgage rates are the top reason younger buyers are holding off on purchasing a home. Nearly one-third of all respondents said they’ve delayed buying because of rates.

Among Gen-Z buyers, 55% said high mortgage rates are causing them to wait. The same goes for 47% of Millennials—who’ve historically been the largest group of homebuyers.

This delay has opened the door for Baby Boomers, who now make up a larger share of the market. But even Millennials are starting to re-engage, with 23% now saying they plan to buy this year (up from 15% last fall). That tells us demand is still there—it’s just waiting for the right conditions.

What Happens Next?

If rates come down closer to the 6% mark, we expect to see more St. Louis buyers jump back into the market. That could mean a surge in competition and a busier summer buying season.

But here’s the catch: If lower rates are the result of a weakening economy or rising unemployment, that could mute some of the expected demand. After all, having a job is a key part of qualifying for a mortgage.

Still, for those with stable income and good credit, this could be a window of opportunity. At Carlson Mortgage, we help our clients lock in low rates and navigate the buying process with confidence. With over 20 years of experience and no hidden fees, we make it easier for you to buy a home—even in a tricky market.

Ready to Secure Your Dream Home in St. Louis?

At Carlson Mortgage, we’re dedicated to helping St. Louis residents navigate the mortgage process and find the perfect loan for their needs. Our experienced mortgage brokers can help you find the perfect loan to fit your needs and budget and will help you make informed decisions about buying a home. Call or text us at (314) 329-7314 or fill out our loan application at www.carlsonstl.com/apply for a purchase or a refinance mortgage, or if you have any general mortgage lending questions.