The Spring Surge: What’s Really Driving Buyer Activity Right Now?
Coming off one of the slowest real estate markets in nearly three decades, you wouldn’t expect the buzz we’re seeing this spring. Interest rates are still high, inventory remains tight, and yet—buyers are back. Activity has picked up, competition is fierce, and multiple-offer situations are suddenly back on the table. So what’s driving this unexpected surge?
It’s not just the weather (though longer days and greener lawns never hurt). What we’re seeing is a psychological pivot: buyers have stopped waiting for rates to “go back down” and started adjusting to a new normal. After nearly two years of rate volatility and inflated rents, many have recalibrated their expectations. What once felt like a temporary market correction now feels permanent—and that mindset shift has reignited the push for homeownership. For many, owning—at a higher rate—is now better than continuing to rent at a premium, especially with rent prices still climbing in most markets.
But that’s only part of the story.
Other Key Forces Behind the Buyer Comeback
Mortgage Rate Movement—Even a Small Dip Matters
While interest rates are still in the 6.5–7% range, even a slight drop is giving buyers a psychological green light. According to recent AP News data, rates have declined from January highs, and loan officers across the country are encouraging buyers to lock now and plan to refinance later. That “buy now, refi later” strategy is adding confidence to the market.
Inventory Is Still Low—But So Are Expectations
Buyers aren’t just adapting to higher rates—they’re adapting to limited choices. They’re compromising more: smaller square footage, fewer updates, or moving to outer areas of town. The mindset has shifted from “waiting for the perfect home” to “let’s get in the game.” As of March 2025, Iowa City has experienced a significant reduction in housing inventory, with only 306 homes on the market compared to 608 during the same period in 2024—a nearly 50% year-over-year decline. This decrease contributes to a more competitive environment for buyers, as the supply of available homes has tightened considerably.
High Rent Is Fueling Urgency
The current market conditions in Iowa City favor sellers, with homes selling relatively quickly. Approximately 57% of homes sold in March 2025 were on the market for under 30 days. This indicates strong demand, likely driven by the limited inventory. Rents have soared across the country, and Iowa City is no exception. Rent fatigue is real—and it’s pushing people to rethink long-term leasing. If your rent is $2,000+ a month, homeownership starts to look like a better investment, even if rates aren’t ideal.
The persistent shortage of housing inventory continues to challenge buyers but there’s some good news locally. In Iowa City, the median sale price of a home was $265K in February 2025, down 11.7% since last year, indicating a competitive market where desirable properties receive multiple offers. This environment compels buyers to act swiftly and decisively.
Demographic Shifts Are In Play
In a surprise twist, baby boomers have overtaken millennials as the largest group of homebuyers, compromising 42% of buyers according to Investopedia. Many are downsizing or relocating closer to family, and they’re often buying with cash or large equity positions—making them strong competitors in a still-tight market.
What This Means for You
Whether you’re buying, selling, or just watching from the sidelines, the spring market is moving. If you’re a buyer, it’s time to come in with a clear strategy—know your numbers, get pre-approved, and act fast. If you’re selling? The market is still in your favor, especially with inventory down nearly 50% year-over-year in areas like Iowa City.
And if you’re wondering what to expect next? Let’s talk. The market’s shifting, but the opportunity is there—you just have to be ready for it.
