Spring is typically the busiest season for the housing market, and with the housing shortage easing and mortgage rates slightly lower than a year ago, home sales could reasonably have been expected to be stronger. Not so far.
Real estate brokerage Redfin reported that both homebuyers and sellers in April were “particularly nervous” about tariffs and ongoing trade battles, and it helped stifle the housing market.
The U.S. and China last week agreed to a temporary reduction in tariffs, which boosted the stock market and lowered the risk of a recession, but also helped drive up mortgage rates, according to Redfin Head of Economics Research Chen Zhao. Even with the temporary reduction, tariffs remain much higher than they were at the start of the year.
Ultimately, the lackluster spring homebuying season, at least to this point, has been due more to perception than reality. Economic uncertainty “is freaking prospective [home] buyers out, even though in many cases it’s not having a tangible impact on their ability to buy a house,” pointed out Dan Close, a Redfin real estate agent in Chicago.
Housing Supply Rose To Five-Year High
Some elements were there for a solid spring homebuying season, including strong housing inventory. Total active listings of homes for sale last month hit their highest level since March 2020, according to Redfin. They were up 1.2% from the month before on a seasonally adjusted basis and up 16.7% from 2024.
New listings rose to their highest level since July 2022, increasing 1.3% month over month on a seasonally adjusted basis and 8.6% from the same time in 2024, which marked the largest annual gain since May 2024.
Housing supply is also rising because the mortgage rate lock-in effect is easing, according to Redfin. More homeowners who have been sitting on ultra-low mortgage rates secured during the pandemic are now moving and giving up those low rates.
But Existing-Home Sales Fell To Six-Month Low
You can’t just blame mortgage rates. The average 30-year-fixed mortgage rate was 6.73% in April, which, yes, was up from 6.65% the prior month and more than double the record low during the pandemic, but still down from 6.99% in April 2024.
Yet, sales of existing U.S. homes fell to a seasonally adjusted annual rate of just under 4.2 million in April, the lowest level since October 2024, according to Redfin.
That sales level is down 0.2% from a month earlier, and down 1.1% from the same time in 2024 — the first annual decline the company has observed in seven months.
Pending sales — which include both existing and newly constructed homes — fell 3.5% from a month earlier on a seasonally adjusted basis. That marks the steepest monthly decline since August 2023, Redfin noted; pending sales were down 2.7% from 2024.
Housing demand is sluggish because the cost of buying a home is climbing, and economic uncertainty is making many Americans hold off on big purchases, Redfin surmised. The median U.S. home sale price rose 1.4% year over year to $438,466 in April.
While that is the slowest price growth in nearly two years, monthly housing payments still hit an all-time high of $2,868 during the four weeks that ended May 4 due to elevated mortgage rates and home prices. For the four weeks that ended May 11, the median U.S. monthly housing payment wasn’t far off at $2,860.
Homes Are Sitting Longer, Selling For Less
More listings mean buyers have more options, and that also often means more room to negotiate and ask for concessions. That is the primary reason, Redfin contended, that home-price growth is slowing and homes are taking longer to sell.
The typical home that went under contract in April was on the market for an average of 40 days. That marks the slowest April since 2019, and compares with 35 days the same month in 2024 and 18 days during the peak of the pandemic homebuying frenzy.
The typical home that sold last month went for roughly 1% less than its asking price — the biggest discount for any April since 2020. Less than one-third (30.2%) of homes that sold in April went for more than their asking price, the lowest April share in five years.
Redfin pointed out some metro-level highlights for April 2025:
- Median sale prices rose most from a year ago in Newark, N.J. (13.4%), Cleveland (11.9%) and Milwaukee (9.7%). The largest declines were in Oakland, Calif. (-5.9%), Jacksonville, Fla. (-3.4%), and Austin, Texas (-3%).
- Pending sales saw their largest increases in Columbus, Ohio (8.6%), Boston (8.1%), and Indianapolis (6.3%). But they fell most in three Florida cities: Miami (-23.1%), Fort Lauderdale (-18.7%), and West Palm Beach (-14.4%).
- Closed home sales rose most in San Diego (8.8%), Phoenix (8%), and Montgomery County, Pa. (4.9%), but fell most in Miami (-22.4%), Fort Lauderdale, Fla. (-17.3%), and Austin, Texas (-14.6%).
- New home listings rose most in Boston (20.9%), Las Vegas (15.2%), and Denver (14.6%). They fell most in Milwaukee (-5.8%), San Jose, Calif. (-5.7%) and West Palm Beach, Fla. (-4.1%).
- In San Jose, Calif., 67.5% of homes sold above their list price, the highest share among the metros Redfin analyzed, followed by Newark, N.J. (65%) and San Francisco (61.1%). The lowest shares all were in Florida: West Palm Beach (6.3%), Fort Lauderdale (7.7%), and Miami (7.8%).
- There were also some significant changes in days-on-market of homes. In Fort Lauderdale, the typical home took 83 days to go under contract, up 20 days from a year earlier — the biggest increase among the metros Redfin analyzed. That was followed by Miami (up 15 days) and Orlando, Fla. (up 13 days). Four metros saw declines: Kansas City, Mo. (down four days), New York (down three days), Minneapolis (down one day), and San Francisco (down one day).
Builder Confidence Falters
Meanwhile, builder confidence fell sharply in May on growing uncertainties stemming from elevated interest rates, tariff concerns, building material cost uncertainty, and a “cloudy” economic outlook, reported the National Association of Home Builders (NAHB).
As a caveat, however, NAHB noted that 90% of the responses it received in May came in prior to the May 12 announcement that the United States and China had agreed to cut tariffs for 90 days to allow trade talks to continue.
“The spring homebuying season has gotten off to a slow start, as persistent elevated interest rates, policy uncertainty, and building material cost factors hurt builder sentiment in May,” stated NAHB Chairman Buddy Hughes.
“However, the overwhelming majority of survey responses came before the tariff reduction announcement with China,” he noted. “Builders expect future trade negotiations and progress on tax policy will help stabilize the economic outlook and strengthen housing demand.”
Even so, “the overall actions on tariffs in recent weeks have had a negative impact on builders, as 78% reported difficulties pricing their homes recently due to uncertainty around material prices,” said NAHB Chief Economist Robert Dietz.
Builder confidence in the market for newly built single-family homes stood at 34 in May, down six points from April, according to the latest NAHB/Wells Fargo Housing Market Index (HMI). That ties the reading from November 2023, and is the lowest since an index of 31 in December 2022.
The HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” It also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three of the major HMI indices posted losses in May. The HMI index gauging current sales conditions fell eight points in May to a level of 37, the component measuring sales expectations in the next six months edged one-point lower to 42, and the measure charting traffic of prospective buyers dropped two points to 23.
The latest HMI survey also revealed that 34% of builders cut home prices in May, up from 29% in April and the highest level since December 2023 (36%). Meanwhile, the average price reduction was 5% in May, unchanged from the previous month. The use of sales incentives was 61% in May, the same rate as the previous month.
