U.S. existing home sales unexpectedly fell 0.5% during April 2025 to settle at a seasonally adjusted annualized rate of just 4 million units, the market's lowest level in seven months and the slowest pace for April since 2009.
While the market had expected 4.1 million units, the numbers missed estimates, weighed down by higher mortgage lending costs, which restricted buyers" ability to enter the market, according to the National Association of REALTORS® (NAR). Although the market had expected 4.1 million units, the numbers missed estimates, hurt by high mortgage borrowing costs, which restricted buyers" ability to enter the market, according to the National Association of Realtors.
National Association of Realtors (NAR).
Regional variation in sales
Home Sales also posted declines in several regions, falling in the Northeast by 2% and in Western states by 3.9%. In contrast, the Midwest grew by 2.1%, while sales remained stable in the South. In a notable development, the total inventory of homes available for sale rose by 9% from March to 1.45 million units, which provided more options for potential buyers, but was not enough to drive sales higher.
Despite the challenges, the Midwest posted growth of 2.1%, while sales remained stable in the South.
Despite the challenges, existing home prices continued their annual rise to $414,000 on average, an increase of 1.8% from April 2024, reflecting continued inflationary pressures in the real estate market.
High mortgage rates and economic uncertainty
The drop in sales came despite a temporary drop in mortgage rates during February and March, the period when most of the contracts that were reflected in the April data were made. According to Freddie Mac, the average interest rate for a 30-year mortgage, the most common, ranged between 6.09% and 6.73% during that period, before later rising to 6.81% last week.
According to Freddie Mac, the average interest rate for a 30-year mortgage, the most common, ranged between 6.09% and 6.73% during that period. The rise in the cost of funding is attributed to the rise in yields on ten-year US Treasury bonds, amid growing concern over uncertain economic trends and the repercussions of tight fiscal policies, especially after Moody's downgraded the US credit rating, undermining investor confidence.
April is traditionally the month of April. April traditionally marks the beginning of the spring real estate season, one of the most active periods for home sales, but this year's poor performance indicates a modest start, raising questions about the market's ability to recover in light of current financial conditions and the economic volatility expected in the second half of the year.
April traditionally marks the beginning of the spring real estate season, one of the most active periods for home sales.
