US Housing Market Wobbles During Major Homebuying Season

Sales of existing homes dropped to their lowest level in six months this spring even as inventory jumped to a five-year high, according to Redfin data.

According to Dan Close, a Redfin Premier real estate agent in Chicago, much of this drop in sales can be linked to growing concerns over the effects of President Donald Trump‘s tariffs and the future of the U.S. economy.

“There’s a general feeling of anxiety in the housing market because no one knows what they’re going to read in the news when they wake up,” Close said in a news release. “That uncertainty is freaking prospective buyers out, even though in many cases it’s not having a tangible impact on their ability to buy a house.”

Why It Matters

For years, a chronic lack of inventory in the U.S. market has brought up the cost of housing across the country and prompted buyers to engage in cutthroat bidding wars to obtain the properties they wanted.

While the existing gap between supply and demand is a long way from being fixed, the country is now experiencing a significant growth in inventory. However, buyers are not showing up for it as they struggle with historically high mortgage rates and growing uncertainty over a potential economic downturn this year.

What To Know

The total number of homes for sale in April—including existing and newly constructed ones—reached the highest level since March 2020 at 1,942,006, up 1.2 percent from March and up 16.7 percent year over year.

New listings alone were up 1.3 percent month over month and 8.6 percent year over year, marking the largest annual gain since May 2024.

The figures should be great news for homebuyers, who are finally getting more options and with them, more negotiating power. But this growth in inventory has not been reflected in a bump in sales.

While spring usually marks a peak in activity for the U.S. housing market, in April, existing home sales dropped to a seasonally adjusted annual rate of 4,196,707, according to Redfin data—the lowest level since October. The rate was also down 0.2 percent from a month earlier and down 1.1 percent year over year, marking the first annual decline in seven months.

Pending home sales—which include both existing and newly constructed homes—dropped by 3.5 percent from March, the steepest decline since August 2023. They also fell 2.7 percent compared to a year earlier.

According to the real estate brokerage, this slowdown in sales during what is traditionally the busiest time of the year for the U.S. housing market signals that potential buyers either cannot afford the listings or they would rather not make such a big purchase during uncertain times.

Despite the recent growth in inventory, prices are still rising in the U.S., continuing to put the affordability bar a little higher for those savings to buy a home. The median home sale price rose 1.4 percent year over year in April to $438,466. While it is the slowest price growth in about two years, it was still almost 70 percent higher than in April 2020, when it was at $302,256.

High mortgage rates are also keeping aspiring homebuyers on the sidelines. In April, the average 30-year fixed-rate mortgage was 6.73 percent, up from 6.65 percent in March but down from 6.99 percent a year earlier.

What People Are Saying

Meme Loggins, a Redfin Premier real estate agent in Portland, Oregon, said in a statement: “A lot of people are selling their homes and downsizing because they’re worried about the economy. During the pandemic, everybody wanted more space for a home office or for their kids to run around, but now people are more focused on saving money. A lot of folks are getting rid of their investment properties, and I’m working with a couple of federal employees who are afraid of losing their jobs, so they’re selling their homes and thinking of moving into condos.”

Joel Berner, a senior economist at Realtor.com, said in a statement previously shared with Newsweek about pending home sales in March: “Pending home sales, or contract signings, measure the first formal step in the home sale transaction, namely, the point when a buyer and seller have agreed on the price and terms.”

He added: “Pending home sales tend to lead existing home sales by roughly one-to-two months and are a good indicator of market conditions. Unfortunately, without significant relief from mortgage rates or an end to the fears of recession, the year over year retreat this March may be a sign of things to come through the peak of the 2025 homebuying season.”

Lawrence Yun, the chief economist at the National Association of Realtors, said in a statement previously shared with Newsweek, commenting on total existing home sales in March: “Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society.”

What Happens Next

Buyers’ inability or reluctance to bid for homes on the market is already having an effect on sellers, who are increasingly being forced to slash prices to make their properties more appealing.

This dynamic could eventually bring down home prices significantly, shifting the market solidly in favor of buyers.