H
ousing Market Sees Sudden Shift as Sales Plummet and Inventory Surges

    Existing home sales in the US dropped to a seasonally adjusted annual rate of 4.2 million in April, marking their lowest level since October 2024, according to Redfin data. This decline follows a seven-month streak of annual gains, with sales falling 0.2% from March and 1.1% year-over-year.

    Pending home sales plummeted 3.5% month-over-month, the steepest drop since August 2023, while year-over-year pending sales were down 2.7%. The pullback in housing activity is attributed to growing buyer hesitation due to rising home prices, elevated mortgage rates, and economic uncertainty.

    The median US home sale price rose 1.4% from a year ago to $438,466 in April, but average monthly mortgage payments hit a new record high due to both rising prices and rates. The 30-year fixed mortgage rate stood at 6.73% in April, up from March but down from a year ago.

    "Buyers are feeling anxious about the market because of uncertainty," said Dan Close, a Redfin Premier agent in Chicago. "That's causing them to hesitate, even if it doesn't affect their ability to buy."

    Tariff fears and economic worries have weighed heavily on market sentiment this spring, despite a recent agreement between the US and China to temporarily reduce tariffs.

    While demand faltered, housing supply surged, with active listings climbing 1.2% month-over-month and jumping 16.7% from April 2024, marking the highest inventory levels since March 2020. New listings also surged to their highest level since July 2022, up 1.3% month-over-month and 8.6% year-over-year.

    "People are selling their homes and downsizing due to economic concerns," said Meme Loggins, a Redfin Premier agent in Portland. "Many are offloading investment properties or moving into condos out of financial caution."

    The easing of the mortgage rate lock-in effect is also playing a role, with many homeowners who secured historically low rates during the pandemic now selling.

    As inventory rises and demand slows, the market has begun tilting in buyers' favor. Homes are taking longer to sell, and price reductions are becoming more common. In April, homes spent a median of 40 days on the market, compared to 35 days a year ago and just 18 during the pandemic boom.

    Buyers who are willing to negotiate are finding deals, with the typical home selling for roughly 1% below its asking price – the biggest discount for an April since 2020. Only 30.2% of homes sold above asking, the lowest percentage in five years for this time of year.