The U.S. housing market this spring selling season is looking like a multicar collision, a result of powerful forces crashing into each other Axios' Neil Irwin writes.

The big picture: Interest rates on home mortgages have spiked more rapidly than they have in decades, reducing affordability. Builders can't get adequate supplies to construct houses more quickly.

• Yet strong income growth and unstoppable demographic forces are propelling high demand.

Why it matters: It’s likely there will continue to be a gap between supply and demand — making for a frustrating market for all involved.

State of play: The rise in mortgage rates in recent weeks is jaw-dropping, and outside the range of any recent experience.

• The average rate on a 30-year fixed-rate mortgage was 4.42% last week, Freddie Mac said, up from 3.76% three weeks earlier. That's the biggest three-week rise since 1987. The rate was 3.05% just three months ago.
• But those numbers are already outdated, based on mortgages locked in last Monday through Wednesday. By the end of last week, Mortgage News Daily's average came in at 4.95%.

The impact: The speed and the scale of the adjustment mean that a family that can afford a $2,000 per month mortgage could have borrowed $424,000 at the beginning of March — but only $375,000 at Friday's 4.95% rate.

• Higher rates reflect a shift in messaging from the Federal Reserve.
• While the central bank has raised its short-term interest rate by a mere quarter-point, long-term rates like mortgages are shaped by investors' expectations of the future path of the economy and Fed policy. That has turned markedly toward higher rates since December.

The supply side of the market has its own troubles, as homebuilders have not been able to deliver enough houses to address demand, holding back sales volumes.

• "Our biggest challenge today is completing homes, not selling them," KB Home chief executive Jeffrey T. Mezger said in an earnings call last week.
• Among the materials in short supply, said COO Robert McGibney: steel ducts needed for HVAC systems, ovens, garage doors, windows, cabinets and siding. He added that "we expect shortages of materials will stay with us throughout this year."

It may be a bumpy path as the housing market finds a new equilibrium. Rising mortgage rates will limit what buyers can bid, yet it is high prices that incentivize suppliers to ramp up production.

• Meanwhile, homeowners with a low mortgage rate may be more reluctant to sell and give up the benefit of a sub-3% rate, further limiting supply.

The bottom line: We may end up with less supply and transaction volume, worsening America's housing affordability crisis.

🎦 Apple+ first streamer to win Best Picture Oscar. (Axios)

🚘 Tesla says in filing it wants to split its stock to pay a dividend. (CNBC)

💰 Company stock buybacks hit record highs. (FT)

⚠️ Highly risky exotic ETFs grow in popularity. (WSJ)

Facing a tight labor market, some big employers are revamping the way they conduct background checks on prospective employers, executives from screening companies told Emily.

• Typically, employers will conduct a seven-year look-back into an applicant's background — but now some are switching to a one-year look, said Ranjeev Teelock, chief product officer at First Advantage, which conducts checks for employers.

Why it matters: Market forces may be prompting employers to do what civil rights advocates have wanted for years. They've long argued that background checks screen out perfectly good candidates with records that are long behind them.

• Widening the pool of potential employees helps address the ongoing labor shortage — and could also help employers keep a lid on wage growth.

State of play: "Suddenly employers are faced with a choice of raising wages to attract workers or attempting to increase hiring of people with records to keep wages low," said Beth Avery, a senior staff attorney at the National Employment Law Project.

• "I hope [the] changes ... are sticky, and continue even after the tight labor market is not as tight," she said.

What to watch: Instead of long look-backs, employers are doing something called "continuous monitoring," regularly checking court records to see if workers were arrested or charged with new infractions, said Teelock.

• Over the past year, there's been a 12% increase in the number of workers who are being continuously monitored, according to Appriss Insights, which works with companies on these checks.
• This comes with some major pitfalls, Avery noted. Black Americans tend to be more harshly treated by police and the courts, so if employers are getting flagged when someone is arrested or charged, it could have a disproportionate effect on them, she said.

Even though the Fed has started hiking rates, consumers and investors think price rises will be tough to rein in, Matt writes.

Why it matters: Economists watch inflation expectations because they can act as a self-reinforcing prophecy.

Driving the news: A fresh reading Friday from the University of Michigan confirms inflation expectations remain at the highest level since 1981.

• A market-based reading of inflation expectations — charted above, and often referred to as a "five-year breakeven" — also kept climbing this past week, hitting a fresh record high.

State of play: Some of this surge is clearly tied to the war in Ukraine, and related energy and commodity cost surges.

• Longer-term measures of inflation expectations — like those that look out over a 10-year horizon — are lower.

The bottom line: If the Fed is going to get inflation under control in the short term, it may still have to break, or at least slow, the expectation that prices are going to continue creeping steadily higher.

• That might mean hiking rates faster, and harder, than people now expect.
• Markets aren't going to love that.

Sales of NFTs, one of 2021's biggest investment crazes, are but a fraction of what they were at last year's peak.

The big picture: Despite the present doldrums, the market for non-fungible tokens — digital objects built to be provably unique — is very likely here to stay. But it will probably go through several more rounds of hype and disillusionment, Axios' Brady Dale writes.

• The basic idea of a completely unique crypto token continues to evolve — for instance, Uniswap, a decentralized crypto exchange, uses NFTs to track liquidity providers’ positions. In other words, it's not "just a JPEG."
• And the two leading NFT marketplaces, OpenSea and LooksRare, are still typically earning between $1.5 and $2 million a day each in fees, according to Token Terminal.

The bottom line: Business is down but definitely not out.

For more from Brady on all things crypto, sign up for the upcoming Axios Crypto newsletter!