HousingWireHousingWire
Available inventory of unsold homes grew by 17,000 this week.
That’s the biggest single-week inventory gain in nearly three years. The supply of homes on the market continues to grow. Three years ago was when mortgage rates were spiking as we exited the pandemic economy. Inventory climbs when interest rates climb. This spring, mortgage rates have stayed higher for longer than expected, and the inventory of unsold homes on the market continues to expand.
Mortgage rates are down for the week, so that’s encouraging, even though they’re still elevated compared to a month ago. And mortgage rates are lower than last year at this time, so the typical mortgage payment is actually about 3% cheaper than it was if you were buying a year ago.
And that’s probably why home sales continued to outpace last year by a little bit. The Altos HousingWire weekly pending home sales count is coming in each week above last year and has not yet notably turned lower in the wake of market chaos from the tariffs. April home sales will come in with a little growth over 2024.
How quickly can this momentum change? It’s going to be a little tricky in the next couple of weeks to track how real estate is faring in the face of general market chaos. This coming week’s data and next Monday’s report will include the Easter weekend, so both new listings and new pendings tend to dip. Last year, Easter was at the end of March, so our comparison to last year will be out of sync with the holiday.
But then suddenly we’ll be rolling into May. May is when we normally see seasonal peaks in home sales and prices. Given the crazy volatility in global financial markets now, a lot can happen in that time. What happens to mortgage rates over the next couple of weeks? What happens in financial markets? Today, Monday, April 21, both mortgage markets and stock markets are moving in the wrong direction.
OK, so everything will dip a bit with next week’s report since it includes the Easter weekend data. There are always fewer new listings and new pendings during the holiday week. So don’t worry too much about that. We’ll be looking at the magnitude of those changes to see if consumer sentiment is changing.
And of course, the most interesting thing about this housing market is how the northern markets and the Sunbelt markets have been on very different trajectories. And this week, Thursday, April 24, is our monthly webinar where we get to take an hour to dive into all the real estate data details and a lot of the local markets. There’s a big disparity in the country still.
OK, let’s dive into this week’s data.
Weekly pending home sales
Let’s start today with the weekly pending home sales. We counted 72,000 weekly pending home sales for single-family homes this week. That’s unchanged for the week and just a smidge higher than last year at this time. As I’ve mentioned, over the last month and a half, home sales have been coming in above last year. In 2024, mortgage rates were at their peak in Q2 and home sales dragged way lower than normal in those months. So the base case for April, May, and June this year is that we should continue to see home sales gains versus 2024. There is more supply now and it’s slightly cheaper to buy. So there are more sales happening.
That’s the base case assumption. But this year, potential homebuyers have a ton of other chaos to factor into their decisions. Are they worried about their jobs? Is their income falling? Are their expenses climbing? These are bearish factors that are only just slightly impacting housing decisions so far. It’s only been a handful of weeks since the worst of the tariff plans were announced. The negative effects are not in housing yet.
And to be clear, we don’t know how hard these negative economic effects will hit housing. Unemployment is still low. American homeowners are in a very strong financial position. Corporations started the year in a very strong financial position. It could be that a recession hits and housing is the most resilient sector.
In this chart, we have the weekly pending home sales. The purple line has been above last year’s blue line for several weeks. Next week’s report will include the Easter weekend, so we’ll break our growth streak. But in May, you can see how restricted home sales were last year, so I anticipate that — absent some crazy market shocks — we should see the May data resume home sales growth over last year.
I mentioned that the local markets are behaving differently. In the weekly pending home sales, Florida stands out as very weak. There are 10% fewer sales happening each week in Florida than the same week a year ago. On average, around the country, home sales are up, but Florida has 10% fewer.
Condos, of which Florida has a ton, are in even worse shape than single-family homes. We’ll look at Florida and some of the other local market variables in the webinar Thursday.
In total, there are 391,000 single-family homes in contract. That’s 3.5% growth for the week. There’s a decent clip of home sales happening. These are all the homes in the contract pending stage now. These are sales transactions that will close in April and May. There are almost 2% more homes in contract than a year ago. April sales, when we hear the headlines next month, will be ahead of 2024.
Inventory
So, sales are staying slightly elevated so far this spring. Meanwhile, the supply of unsold homes continues to grow.
One of the reasons sales are up is simply because there is more selection of homes to buy. I had a friend this weekend realize that a home in his dream neighborhood finally went on sale. He found himself competing with three other buyers. He wasn’t previously actively in the market, but suddenly there are homes available where there haven’t been in many years in some parts of the country.
And prices are a little lower in this market, so some buyers are motivated. As a result, greater supply enables greater sales — to an extent.
And there are now just over 719,000 single-family homes unsold on the market. There are another 220,000 condos. Unsold inventory climbed 2.4% for the week. That’s a fast clip, but not crazy. As I mentioned, the 17,000-unit gain in unsold homes on the market is the biggest week in three years. Unsold inventory is 32.5% greater than a year ago.
In this inventory chart, I have each year as a line. Inventory always climbs in April, of course, except for the 2020 pandemic year.
We’re about to cross over and have more homes unsold on the market in any April since 2018. I’ve highlighted 2018 here in green. 2018 was a rising interest rate year and a rising inventory year, as it was the first time Trump tariffs slowed the economy. In April 2018, there were 830,000 single-family homes unsold on the market. Now there are 719,000. We still have a ways to go before we reach the old-normal levels, but our inventory forecast now says we’ll end the year with more homes on the market than in 2019. We’ll review the latest forecasts this Thursday in the webinar.
That supply, like I said, means more sales are possible — but also that home prices don’t have any upward pressure. I think we’re seeing both of these results now.
New listings
Housing supply has two components. First is the unsold inventory on the market. The second is the rate of new listings each week. Inventory is like the reservoir — how full is the reservoir? New listings measure how hard it’s raining. And with three years of rising mortgage rates, the reservoir of inventory has finally been filling back up to the old normal levels, but it hasn’t been raining very hard for many years.
The rate of new listings has been very low. In 2025, we’re finally emerging from the drought. We’re getting close to the old normal levels of new listings each week.
This week saw 77,000 new listings unsold for single-family homes. That’s up 1% for the week.
There were another 15,000 new listings that went to immediate sale. Those unsold new listings are 12% more than a year ago. In total, it comes to 4% more sellers now than the same week a year ago. There are more sellers each week, and there are fewer bidding wars, so those new listings are adding more quickly to the active inventory. They’re filling the reservoir faster.
In this chart, we have the unsold new listings each week. The purple line is up there in the top set of gray lines. This shows us that we finally — after many years — have sellers at a pace that’s closer to normal. As I mentioned, next week’s report will include the late Easter holiday data, so we’ll see a dip in new listings next week. Then as we roll into May, the number we’re looking for is 80,000. Do we get to 80,000 single-family new listings in a week in May?
My colleague Logan Mohtashami notes that this is a significant threshold. I agree — it’s a good way to look at new listings data. Think about it this way: if a decent year of home sales is 5 million units, that means there have to be more than 100,000 sellers each week, condos and single-family combined. That’s about 80,000 to 100,000 single-family sellers each week in the peak season where we are now. Two weeks from now, look for 80k — and we’ll consider that a healthy change in the housing market.
Home prices
As supply grows, one result is that there is less upward pressure on home prices. There are 32% more homes on the market and only 2% more home sales happening. Homebuyers obviously have greater selection, and sellers have to take that into account when pricing their homes for sale.
As a result, the median price of this week’s pending home sales came in at $399,000. That’s unchanged for the week and just a tiny fraction above last year at this time. It seems unlikely that home prices will climb above $400,000 this spring. The real question is what will happen to demand in the fall.
Last year, we saw price lows with mortgage rates falling, and purchase prices got a surprising boost. So, this year’s purple line in the chart is just above last year’s blue line. At the right end of the chart, you can see the 2024 blue line elevated late in the year. This year’s pattern will be a function of mortgage rates, of course, but also of the macroeconomic situation.
Price reductions
Continuing the pricing pattern of recent weeks, the percentage of homes on the market with price cuts ticked up 40 basis points this week to 35.6%. Price reductions have not really been accelerating over the past month. The number of listings that have cut their price from the original list price is elevated, but it is not moving quickly.
In this chart of price reductions, you can see this year’s purple line ticked up a bit for the week but has been on a plateau for a while. I think what we’re seeing here is that enough homes are moving into contract, so sellers haven’t felt super compelled to cut prices.
But look at the blue line from 2024 at this time. Last year, the economy was reporting hotter than expected, and interest rates spiked. Mortgage rates hit 7.1% in late April. You can see in the data how buyers backed off, sellers didn’t get offers, and so they cut prices to stimulate demand. The 2024 blue line for price reductions started climbing quickly in late April. Sellers didn’t get a breather until September when rates had fallen back closer to 6%.
Contrast that with the green line from 2022, when rates jumped to 7.5% in September and price cuts responded immediately.
The takeaway from the price reductions data is that, as of right now, price conditions are not worsening. In much of the country, conditions are soft, demand is light, and supply is increasing — but on average, the market is not deteriorating.
​
