The sales of existing homes experienced a decline in April as apprehensions surrounding tariff-related uncertainties overshadowed the critical spring housing season, which is traditionally a peak time for real estate transactions.
On Thursday, the National Association of Realtors (NAR) reported a surprising decline of 0.5% in existing home sales for April, bringing the seasonally adjusted rate down to 4 million. This marks the slowest pace observed for April since 2009, along with a 2% drop compared to the same month in the previous year.
Consumer confidence had already begun to falter when President Donald Trump unveiled reciprocal tariffs on imports from all nations on April 2. Although the administration postponed most of these tariffs for 90 days on the day they were scheduled to be implemented, the initial announcement caused market instability and intensified worries about an already fragile economy.
“The home sales recorded in April likely went under contract back in March and early April, a period when mortgage rates remained relatively stable, fluctuating between 6.6% and 6.7%,” stated Danielle Hale, Chief Economist at Realtor.com. “Even prior to the significant trade announcement on April 2, consumers expressed concerns regarding their personal financial outlook and job security, which likely undermined their confidence in making substantial purchases like homes.”
Recently, mortgage rates have seen a slight increase, raising new affordability issues for potential buyers. If borrowing costs continue to escalate, this upward trend could exert additional pressure on a housing market that is already showing signs of sluggishness.
As of May 22, the average rate for a 30-year fixed mortgage was approximately 6.86%, based on data from Freddie Mac. This represents a modest increase from the previous week’s average of 6.81%, although it remains lower than the 6.94% recorded one year ago — providing some relief for borrowers, even as rates remain elevated in comparison to pre-pandemic levels.
Despite the ongoing weakness in sales, there is positive news for home buyers. The inventory of existing homes available for sale rose by 9% from March and 20.8% from the same time last year, reaching 1.45 million units in April. This increase in inventory could help alleviate price pressures in various markets by stabilizing home prices and offering buyers more choices.
“At a broader level, we are still experiencing a mild seller’s market,” noted Lawrence Yun, Chief Economist at NAR. “However, with the highest inventory levels seen in nearly five years, consumers are better positioned to negotiate favorable deals.”
Home Prices Continue to Rise: 22 Consecutive Months of Increase
Home prices continue their upward trajectory across the nation. The national median price for an existing home has surged by 1.8% compared to the previous year, now standing at $414,000. This marks an all-time high for April and represents the 22nd consecutive month of year-over-year price increases. Regionally, while prices have dipped in the South and West, they have risen in the Northeast and Midwest.
“Home shoppers remain optimistic amid an expanding selection of homes for sale, but opportunities can vary significantly by region and price range,” explained Hale. Looking forward, Hale added that mortgage rates, a critical factor influencing affordability, are expected to remain within a range that is more likely to hinder rather than enhance home sales in the near term.
Explore More Insights from Money: Valuable Resources for Home Buyers
Discover how I successfully purchased a home with zero down payment while securing a 4.75% interest rate.
Are mortgage rates finally poised to decline in 2025?
Check out the 8 best mortgage lenders for 2025 to find the right fit for your financial needs.
