Homebuying Season Underperforms as Supply Hits 5-Year High

The median home sale price was $438,466 in April, when there were 1.94 million homes for sale, up over 16 percent from a year back.

A home for sale in San Anselmo, Calif., on March 22, 2023. Justin Sullivan/Getty Images

The sale of existing homes declined in April on a monthly and annual basis amid a jump in supplies, real estate brokerage Redfin said in a May 19 statement.

Sales fell to a seasonally adjusted annual rate of nearly 4.2 million units in April, the lowest level since October 2024. It was down 0.2 percent from March and lower by 1.1 percent from April 2024—the first annual decline in seven months.

However, there were 1.94 million homes for sale in April, up over 16 percent from a year back. This was the highest level of supply since March 2020.

“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, one might expect home sales to be stronger,” the brokerage said.

“But Redfin agents report that homebuyers and sellers last month were particularly nervous about tariffs and the ongoing trade war.”

Redfin attributed the sluggish housing demand to high home prices and elevated mortgage rates.

The median home sale price was $438,466 in April, up 1.4 percent year-over-year. The average 30-year-fixed mortgage rate in April was 6.73 percent, up from 6.65 percent in March. Monthly housing payments hit a record high in April.

This past week brought some relief from tariff anxiety when the United States and China agreed to a 90-day reduction in import charges.

According to the agreement, the United States lowered tariffs on Chinese imports to 30 percent while China rolled back its U.S. import tariffs to 10 percent.

In a May 12 statement, Buddy Hughes, chairman of the National Association of Home Builders (NAHB), welcomed the deal, calling it a “positive step.”

“NAHB urges the administration to move quickly to obtain fair, equitable trade deals with other nations that will result in the elimination of tariffs that are currently hurting building material supply chains and raising construction costs.”

The NAHB said on May 15 that builder confidence for newly built single-family homes “fell sharply” this month due to a “soft spring selling season.”

On the plus side, Hughes said builders are expecting that “future trade negotiations and progress on tax policy will help stabilize the economic outlook and strengthen housing demand.”

Housing Affordability

A May 15 report from real estate marketplace Zillow said that some prospective home buyers have adopted a wait-and-see approach.

“In April, many households didn’t know what was next for their jobs, investment portfolios, or budgets. As a result, some potential buyers sat on the sidelines, awaiting further clarity before making significant purchases—including homes,” the report said.

There was almost 20 percent more inventory last month compared to a year back, providing buyers with more options. Meanwhile, sellers are increasingly opting to cut prices to attract buyers.

“Though the spring housing market started more sluggishly than desired, activity is underway, with improved options for buyers, steady price growth, and better affordability than last year; all positive indicators for the months ahead,” Zillow said.

Meanwhile, lawmakers are taking action to address the affordability issue.

Last month, a bipartisan group of senators introduced the Affordable Housing Credit Improvement Act that is expected to help build nearly 1.6 million new affordable homes over the next 10 years, according to an April 29 statement from the office of Sen. Todd Young (R-Ind.), a bill sponsor.

The legislation is related to the federal government’s Low-Income Housing Tax Credit (LIHTC) program.

LIHTC provides states and local agencies with around $10.5 billion in annual budget authority to issue tax credits for acquiring, rehabilitating, or building rental housing for lower-income households.

The Act would boost tax credits available to states by 50 percent for the next two years. It would also make a 12.5 percent temporary tax credit increase from 2018 permanent.

“It’s time for Congress to meet the housing crisis with the bold solutions it demands, and that starts with increasing housing supply,” said Sen. Ron Wyden (D-Ore.), another bill sponsor.

“Our bill will deliver some much-needed relief to families by supporting existing, successful federal housing programs and building over one million new units of affordable housing. I am all in to bring down costs and make housing more affordable for everyone no matter your zip code.”