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Existing home sales in the United States recorded a slight increase in April, supported mainly by gains in the multi-family housing segment, while single-family home sales remained flat. High mortgage rates, rising inflation and stretched affordability continued to weigh on demand, especially among first-time buyers. Home prices touched a record level for April despite slower annual growth, while housing inventory stayed below pre-pandemic levels. Economists believe the market may continue to face pressure in the coming months as consumer sentiment weakens and borrowing costs remain elevated, limiting a broader recovery in housing activity.
Existing home sales in the United States posted a marginal increase in April, but the housing market continued to face pressure from elevated mortgage rates, high inflation and affordability concerns that are keeping many buyers away. Advertisement
Data released by the National Association of Realtors showed that existing home sales rose 0.2% to a seasonally adjusted annual rate of 4.02 million units during the month. Economists surveyed by Reuters had expected sales to reach 4.05 million units. The overall increase was driven by the multi-family housing segment, while single-family home sales remained unchanged.
The latest numbers reflect contracts that were largely signed in February and March, when mortgage rates started moving higher again. According to data from Freddie Mac, the average rate on a 30-year fixed mortgage had briefly fallen below 6% in late February before climbing above 6.3% by the end of March. Rates moved higher as inflation concerns intensified amid geopolitical tensions involving the United States, Israel and Iran. Mortgage rates continued to remain elevated through April.
Housing affordability remained one of the biggest concerns for buyers. The National Association of Realtors’ affordability index fell to 110.6 from 113.5 in March, although it remained above year-ago levels. Economists noted that high borrowing costs and rising living expenses were making home ownership difficult, particularly for first-time buyers.
Ben Ayers, senior economist at Nationwide, said many homes were staying longer on the market because of weak buyer interest. He added that affordability challenges had worsened due to the recent increase in mortgage rates and that many first-time buyers continued to find renting more financially viable than purchasing a home.
Consumer inflation has also remained a concern for households. Inflation-adjusted wages have seen only marginal growth, while fuel prices have risen sharply since the conflict in the Middle East escalated. Economists expect inflation data for April to show one of the strongest annual increases in recent years, further increasing pressure on household budgets.
Market sentiment has weakened significantly, with economists warning that home sales may struggle to move meaningfully above the 4 million annualized level in the near term. Bradley Saunders, North America economist at Capital Economics, said risks to the housing market outlook remain tilted to the downside.
Regionally, home sales increased in the South and Midwest, remained unchanged in the Northeast and declined in the West. Overall sales levels were flat compared to the same period last year.
The median existing home price reached USD 417,700 in April, marking the highest level recorded for the month, though annual price growth slowed to 0.9%. Most transactions took place in the USD 250,000 to USD 500,000 price category.
The luxury housing segment continued to outperform the broader market. Homes priced above USD 1 million saw stronger activity, reflecting what economists described as a “K-shaped” economy, where higher-income households continue to benefit from strong stock market gains while lower-income buyers struggle with affordability pressures.
Housing inventory showed some improvement but remained below historical levels. Existing home inventory rose 5.8% to 1.47 million units during the month, still well below the roughly 1.83 million units seen before the COVID-19 pandemic.
Lawrence Yun, chief economist at the National Association of Realtors, said the market requires nearly 30% more inventory growth to move toward balanced conditions.
At the current sales pace, available inventory represents a 4.4-month supply, slightly higher than the year-ago level of 4.3 months. Properties also stayed on the market longer, with the median number of days increasing to 32 from 29 a year earlier.
First-time buyers accounted for 33% of all transactions, lower than the 34% share recorded a year ago and well below the 40% level that economists and realtors generally consider necessary for a healthy housing market. All-cash purchases represented 25% of sales, unchanged from last year.
Demand for vacation homes increased, accounting for 8% of transactions compared to 5% a year ago. Distressed sales, including foreclosures, remained stable at 2% of total transactions.
Carl Weinberg, chief economist at High Frequency Economics, said homeowners with ultra-low mortgage rates secured during the pandemic period remain reluctant to sell because moving would mean taking on significantly higher borrowing costs. He noted that low resale activity continues to limit inventory across the market.
Source Reuters
5th Jun, 2025
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