High mortgage rates create divided housing market as spring buying season heats up

High mortgage rates are keeping many potential buyers on the sidelines this spring, even as the housing market enters what is typically one of its busiest seasons.

For new homeowners Elizabeth and Izias, the decision to buy came with a growing family in mind.

"We want more kids too, so we needed the space eventually," Elizabeth said.

But the couple wasn't sure homeownership was financially within reach a concern shared by many across the country. Nearly two in three renters don't think they'll be able to buy a home in the foreseeable future, according to a recent survey.

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A 30-year fixed rate mortgage now sits at 6.37%, up slightly from last week, according to a new report released Thursday. Overall, mortgage rates remain near their highest levels in two decades.

That's likely contributing to a slowdown in sales. Existing home sales dipped 3.6% in March, dropping to a nine-month low, according to the National Association of Realtors. The median home sales price also hit nearly $409,000, up 1.4% from a year ago.

The conditions have created a divided market one that benefits current homeowners while squeezing out potential buyers.

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"We have homeowners who have gained a tremendous amount of housing equity as home prices have gained, but then you have first-time home buyers who are struggling to find an affordable property, who are trying to save diligently for a down payment and encountering higher home prices than they have seen," Jessica Lautz, deputy chief economist at the National Association of Realtors, said.

Meanwhile, the picture looks different for newly built homes. Sales of properties built by developers jumped more than 7% in March compared to the previous month. The median price of those homes also dropped, as builders can cut deals and offer financial incentives to attract buyers.