A realtor gives neighbors a tour during an open house at a home in Palm Beach Gardens, Florida, on Jan. 11, 2026.

Zak Bennett | Bloomberg | Getty Images

Spring is traditionally the busiest season for home sales, and while this year’s market dynamics have shifted strongly in favor of buyers, broader forces in the economy are creating significant challenges.

The most important factor in any season is mortgage rates. They were expected to be lower this year, as the Federal Reserve dropped its lending rate to counter inflation, but the war with Iran has turned that on its head. The cost of oil is shooting higher, leading to rising inflation and causing the Fed to reconsider.

Now U.S. bond yields are rising, with mortgage rates following suit.

The average rate on the popular 30-year-fixed mortgage had started this year lower, even briefly dipping below 6% at the end of February, but it rose sharply this week to 6.53% on Friday, the first day of spring, according to Mortgage News Daily. It is now just 18 basis points below where it was a year ago.

Higher rates will weigh on affordability, but other factors have flipped the market in favor of buyers. Homes are sitting on the market longer, sellers are increasingly willing to lower prices and the supply of homes for sale is rising, albeit not as quickly as it should be.

“As the housing market approaches the ‘best time to sell’ season, it sits in a precarious position, caught between long-term improvements and sudden short-term instability,” Jake Krimmel, senior economist at Realtor.com, wrote in a Weekly Housing Trends report. “Everything seems much more unsettled and uncertain than it did just a month ago.”

For the week ending on March 14, active inventory was up 5.6% year-over-year, according to Realtor.com, but new listings were down 1.4%.

This means the number of homes for sale is climbing not because there are so many more sellers, but because the homes on the market are sitting. That may be because potential sellers who expected to put their homes on the market are holding back due to concerns about the implications of the Iran war.

“I think inventory is the bigger decider,” said Jonathan Miller, director of markets for StreetMatrix, a housing market data provider. “The idea that rates are going to noticeably come down this year, I think, is generally off the table.”

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Location, location

Given the disparity in inventory across different markets, this spring is likely to be a tale of many cities.

For example, in February, active listings in Las Vegas, Seattle, Cincinnati and Washington, D.C., were all up over 20% from a year ago, according to Realtor.com. Listings in San Francisco, Chicago, Miami and Orlando, Florida, meanwhile, were lower than a year ago.

Home prices had been cooling off for much of the past year, and they continue to do so. Prices were just 0.7% higher in January than they were in January 2025, according to Cotality. That’s down from the 3.5% annual growth at the beginning of 2025. Higher mortgage rates, however, are taking away from that improved affordability.

The Northeast and Midwest are seeing the strongest price appreciation, led by New Jersey, Connecticut, Illinois, Wisconsin and Nebraska, due to tighter supply in those regions, according to Cotality.

Cotality ranks 69% of top metropolitan housing markets as overvalued, noting undervalued markets like Los Angeles, New York City, San Francisco and Honolulu could see a rebound in prices in 2027.

“Ultimately, locations with consistent job growth will remain the primary engines for price appreciation, but they also have larger inventory deficits which are driving pressure on home prices,” Selma Hepp, Cotality’s chief economist, wrote in a recent report.

As for new construction, buyers are likely to see better deals this spring, as builders are struggling to unload an oversupply of homes. Inventories hit a 9.7-month supply in January, according to the U.S. Census, as the result of sales falling to the lowest level since 2022. A growing share of builders cut prices in March, according to the National Association of Home Builders.

“Affordability for buyers and builders remains a top concern,” Bill Owens, chairman of the NAHB, said in a release. “Many buyers remain on the fence waiting for lower interest rates and due to economic uncertainty. Builders are facing elevated land, labor and construction costs and nearly two-thirds continue to offer sales incentives in a bid to firm up the market.”

Construction of single-family homes also dropped in January. While some are blaming rough winter weather for the weakness in the new home market, builders are consistently battling affordability for both their customers and their own bottom lines. Costs for land, labor and materials have not eased.

“I think this is not going to be an inspiring year for the housing market. It started out with high expectations. I think the war, whatever the outcome, has really dampened enthusiasm and kept uncertainty really high,” StreetMatrix’s Miller said.

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The post The spring housing market is on, but mortgage rates just shot higher appeared first on Our Story Insight.

Say hello to life at the mall. 

The classic American mall is undergoing a dramatic transformation as real estate developers swap out dying department stores for apartments, ushering in an era where living at the mall could soon become a new norm.

Some U.S. developers are knocking down department stores like Macy’s or JCPenney and using the spaces and their parking lots to put up apartment buildings next to the mall or connected to it via walkways and green spaces. In other cases, they’ve built apartments inside of shuttered storefronts and other shopping center properties or gutted them altogether to make way for a mix of housing, retail, restaurants, outdoor spaces and experiences. 

“The mall is becoming cool again,” said Jacob Knudsen, the vice president of development for Macerich, which is currently redeveloping the FlatIron Crossing Mall in Broomfield, Colorado to add housing. “So being able to live by it, work by it, play by it, go to restaurants by it, we’re definitely seeing this as a trend.” 

Rendering of the redeveloped FlatIron Crossing

Source: Macerich

Rendering of the redeveloped FlatIron Crossing

Source: Macerich

This new version of the American mall comes as shopping centers across the country fight for survival and look to transformation to avoid extinction. It’s clear that consumers still enjoy shopping in person after the Covid pandemic, but the traditional anchor department store has been in decline since 2001 and is no longer the draw it once was.

As companies like Macy’s, JCPenney and Sears shrink or cease to exist altogether, real estate developers have been forced to get creative to repurpose those spaces, which typically take up at least half of a mall’s footprint. 

Amazon distribution centers, pickleball courts and even an NHL training facility have all replaced big-box stores at American malls. But as the country contends with a housing crisis, the fastest growing use of these spaces is apartment complexes, real estate developers said. As of January 2022, at least 192 U.S. malls planned to add housing to their footprint, and at least 33 had constructed apartments since the pandemic began, according to Realogic, a real estate consulting firm. At least a dozen more apartment projects are underway at malls across the country, including in California, Florida, Arizona and Texas. 

“There’s just too much retail in the U.S,” said Oscar Parra, the principal of Pacific Retail Capital Partners’ Special Situations Group. “[It’s] like four times higher than any other nation … I don’t know of a market that needs a million square foot mall.”

A U.S. shopping mall with 1 million square feet could hold more than 17 football fields

Parra, whose firm is building housing at the site of a former Carson’s department store at a mall outside of Chicago, pointed to a similar project underway at Westfield’s Garden State Plaza in Paramus, New Jersey — one of the largest and most lucrative malls in the U.S.

“They have excess land, instead of using it for retail, they’re putting in apartments,” said Parra. “They didn’t see value in adding more retail to one of the most productive malls on the planet and that’s a signal.”

For mall owners, the numbers make sense. While top-tier malls continue to be in high demand, nearly 34 million square feet of U.S. mall space is vacant and off the market. Most Americans live within an hour of a mall with a high vacancy rate or low consumer traffic — or is abandoned altogether.

A vacant escalator in the Shops at Sunset Place mall on April 07, 2021 in Miami, Florida.

Joe Raedle | Getty Images

Add in the nationwide housing deficit of 4.5 million homes and it makes a trend that experts say is poised to continue. For developers, adding apartments can not only fill a need, but also bring people closer to their remaining retail stores and restaurants.

“Malls are an opportunity,” said Knudsen. “This is an opportunity to find land and have a built in customer base to get people into the mall.”

While living at the mall is a unique opportunity, it comes with challenges and hurdles. Construction costs are high, and developers need to navigate a maze of zoning laws and antiquated lease agreements to get projects off the ground because malls aren’t typically zoned for multifamily developments. Plus, the shape of a typical mall and department store almost always requires a complete teardown to bring in housing.

It might seem easy enough to transform an old Macy’s store into a few dozen apartments, but given the shape of the building, it’s difficult to do in a way that gives every apartment access to natural light and air.

“What we’ve learned is it’s better to disconnect it from the mall, not in every case, right? If you’re very dense urban retail, then you might want to integrate [apartments] into the property itself and we’ve seen some examples of that,” said Parra. “But mostly the idea is, tear the box down… scrape it, get rid of it, and then create a little bit of a buffer between the mall and the [apartment building].”

What’s it like to live at the mall? 

Apartments at U.S. malls aren’t everywhere yet. Many of the housing developments are still under construction and will start renting over the next few years, while others are just now opening their doors.

The Lafayette Square Mall in Indianapolis is slated to open 1,200 apartment units, including affordable housing in a former Sears building, beginning in 2025. The Paradise Valley Mall in Phoenix just opened up 400 luxury units on Nov. 15. 

While apartment development has picked up in recent years, housing at the mall has been around for at least a decade. Take The Arcade in Providence, Rhode Island – the oldest indoor shopping mall in the country. The shopping center, which had long been a focal point of Providence’s bustling downtown, fell on hard times after the Great Recession. By the end of the 2000s, it was completely vacant. 

Passers-by walk through the the newly renovated Arcade mall, in Providence, R.I., Monday, Oct. 21, 2013.

Steven Senne | AP

However, rather than letting the historic building fall into ruin, developers came in and built 48 micro units on the second and third floors. Dozens of tenants now live there, and real estate investors have bought other units to rent on Airbnb.

“It’s cool to be part of such a historic building and knowing that every single one of these units used to be a shop of some kind,” said Amy Henion, a 33-year-old graphic designer who moved into The Arcade two years ago. “You have access to amenities that you don’t get if you’re just living in a home in a suburb, like, if I want to get my hair cut, I can walk downstairs and get my hair cut. If I want to pick up lunch, I don’t even have to leave the building, even if the weather outside is awful.”

Amy Henion, a graphic designer, said living at a mall is both unique and convenient 

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Scott Sheehan, a 31-year-old tax advisor and real estate investor, purchased an apartment inside the mall for $250,000 in October so he can rent it out on Airbnb. He chose the space because of its proximity to the train station, airport and nearby Brown University, along with major employers like big financial firms.

He estimates he can earn between $25,000 and $45,000 in revenue annually by renting the unit out to tourists. 

“At the end of the day, it’s a unique experience,” said Sheehan. “It’s a great alternative to a hotel room.”

Scott Sheehan purchased an investment property at The Arcade and is renting it out on AirBnB

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The Grand Avenue Mall in Milwaukee, Wisconsin went through a similar renovation to add apartments that began in 2017. The once bustling shopping center in Milwaukee’s downtown was half empty by the end of the Great Recession and was later sold to developers, who began converting the space in the late 2010s. Dozens of apartments were opened up for rent in the last few years, and tenants now have access to amenities like a pickleball court, a “doggy wellness center” and a gym.

Shops Of Grand Avenue on September 20, 2014 in Milwaukee, Wisconsin. 

Raymond Boyd | Michael Ochs Archives | Getty Images

“We’re on the fourth floor. It used to be the YMCA. So where our apartment unit is was like the weight room of the YMCA and our hallway that goes around the whole building used to be the track,” said John Borchardt, 40, who moved into the former Grand Avenue Mall three years ago with his wife and dog Rodger. “It still kind of looks like a mall on the second floor.”

On that level, apartments were built inside of former storefronts. The units are unique but they also come with quirks. For example, they all have elaborate foyers with floor-to-ceiling windows, but those front rooms are also on full display to the public, which can create privacy concerns. Plus, some of the units don’t have windows because developers had to work with the storefront’s originally layout, said Borchardt.

Some apartments were built inside of former storefronts, which make for unique foyers that are on full display to the public.

Courtesy: John Borchardt

He said his unit, which does have windows, is in a different part of the complex and doesn’t have the same architectural challenges.

Downstairs, he has access to a TJ Maxx and Foot Locker — the only remaining storefronts from the original mall — which he said is “super convenient” when he wants to take his dog shopping for new toys at the off-price store.

“He’s like a celebrity in the building. Everyone knows our dog. So it’s a very dog friendly space,” he said. “If it’s cold outside, or if it’s snowing or raining, we can walk the dog around, you know, like mall walkers back in the 90s or whatever, we can just walk around like five city blocks without ever going outside. It’s very cool.”

John Borchardt’s dog Rodger enjoys going for walks inside of the former Grand Avenye Mall and visiting TJ Maxx.

Courtesy: John Borchardt

The former Grand Avenue Mall in Milwaukee is now home to dozens of apartments and a few retail shops

Courtesy: John Borchardt

A Kohl’s recently moved in and renovations are underway at different parts of the complex, said Borchardt. Plus, there’s the new food court, which has more than a dozen restaurants and is a draw for tourists, locals and building residents alike. Borchardt said the “very busy” area boasts separate dining areas and a self-serve beer tap with rotating brews.

While the renovated food court is convenient, Bordchardt said easy access is also “a little bit of a problem” because of how easy it is to avoid cooking. 

“We can just order online, pick it up. There’s ice cream down there. So it’s just a little too easy to get takeout,” he said. “But it’s really convenient to have, like, if we were ever snowed in we can survive without ever leaving the building for quite a while.”

The 3rd St. Market Hall is a modern day food court, open to building residents, locals and tourists

Courtesy: John Borchardt

Najla Kayyem, Pacific Retail’s executive vice president of marketing, said the ease of access is kind of the point. 

“It’s really services and amenities based so creating convenience for our residents at every corner, so that they don’t have to leave, and so that they can get all of their daily needs done within that shopping experience,” said Kayyem.

While it could take years to get there, Kayyem said living at the mall could one day be similar to vacationing at a resort, where everything is charged to one account using a centralized system. 

“It’s tough when you have a mix of ownership groups, but ideally, you’re living somewhere and you have an account, and you can shop and dine and eat and buy things on your account,” said Kayyem. “That would be real, true, seamless integration to make it frictionless for someone to live there.”

— Additional reporting by DeLon Thornton and Shawn Baldwin

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