US New Home Sales Unexpectedly Surge in April to 3-Year High

Housing affordability remains an issue, housing market experts say.

A "For Sale" sign in Washington, on May 19, 2025. Madalina Vasiliu/The Epoch Times

New home sales in the United States unexpectedly surged in April to the highest level in more than three years, new government data show.

According to new figures from the Department of Commerce’s Census Bureau, released on May 23, sales of new single-family homes advanced 10.9 percent to a seasonally adjusted annual rate of 743,000 units, from a downwardly adjusted 670,000 in March.

This is the highest sales volume since February 2022 and higher than the consensus forecast of 690,000 units.

While inventories slowed from March to April, housing stockpiles surged 8.6 percent from a year ago. Additionally, the U.S. real estate market maintains 8.1 months of supply at the current rate of sales activity.

The median sales price of new houses sold in April was $407,200. This is up 0.8 percent from the previous month and is 2 percent below the April 2024 price of $415,300.

New National Association of Realtors data, released on May 22, reported that existing home sales slowed in April.

Last month, existing home sales dropped 0.5 percent to a seasonally adjusted rate of 4 million units, the second consecutive monthly decline.

The United States has endured historically low levels of existing residential properties because of the golden handcuff effect. Many homebuyers purchased their houses in the early days of the COVID-19 pandemic, when mortgage rates were at all-time lows. As a result, many homeowners bought homes at 3 to 5 percent, much lower than today’s current rate of nearly 7 percent.

“Home sales have been at 75 percent of normal or pre-pandemic activity for the past three years, even with seven million jobs added to the economy,” Lawrence Yun, chief economist at the National Association of Realtors, said in a statement. “Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand.”

However, total housing inventory is improving in this corner of the market, climbing nearly 21 percent from a year ago.

Mortgage Rates

Despite optimistic signs that home prices are improving, housing affordability remains a considerable challenge amid elevated mortgage rates, says Bill Adams, chief economist for Comerica Bank.

For the week ending May 22, the average interest rate on a 30-year fixed mortgage rose by 5 basis points to 6.86 percent, the highest rate in more than three months, according to Freddie Mac’s Primary Mortgage Market Survey.

“High mortgage rates are likely to persist as a drag on housing,” Adams said in a note emailed to The Epoch Times.

“Homebuying affordability is gradually improving as prices rise slower than incomes. But factoring in mortgage rates, prices, and incomes, homes are still very expensive compared with the pre-pandemic period.”

This, Adams adds, will keep younger households in rental units for an extended period, which could support multi-family construction trends.

Government data reported that housing starts rose 1.6 percent in April, buoyed by the multi-family segment, which surged nearly 11 percent.

“Homebuilding activity picked up to start the second quarter as multi-family construction continued to trend higher with year-to-date starts 14.3% above 2024 levels,” Andrew Foran, an economist at TD Economics, said in a note.

A sign is posted in front of an apartment building with available rentals in San Francisco on June 9, 2023. Justin Sullivan/Getty Images

However, according to Redfin analysts, this could be a lagging indicator because permits to construct U.S. apartments fell below pre-crisis levels last month.

“New apartments are being rented out at the slowest speed on record, and builders are pumping the brakes because elevated interest rates are making many projects prohibitively expensive,” Redfin’s senior economist, Sheharyar Bokhari, said in a report.

“At some point in the next year, the slowdown in building will mean that renters have fewer options—potentially leading to an increase in rents.”

For now, rental unit costs have been trending downward over the past couple of years.

Data from Realtor.com show that asking rents decreased by 1.7 percent year over year in April, with the median price at $1,699, the 21st consecutive month of year-over-year rent decline.