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A surge in active listing supply and an increase in price reductions failed to lure more homebuyers off the sidelines in April, as pending home sales dropped compared with a year ago.
That’s according to the Realtor.com® economic research team’s new monthly housing trends report for April, which provides one of the earliest snapshots of the housing market in the wake of President Donald Trump’s new tariffs.
The number of homes actively listed for sale rose 30.6% in April from a year ago, to 959,251—surpassing inventory in April 2020 at the onset of the COVID-19 pandemic, though still down 16% from April 2019.
The share of listings with price reductions also hit a multiyear high of 18%, the highest share for any April since at least 2016. The national median list price for homes was $431,250, largely unchanged from last year.
Still, pending home sales—a measure of homes under contract—fell 3.2% compared with last year, as an uptick in mortgage rates and economic uncertainty weighed on buyer demand.
Recent consumer confidence data showed a sharp plunge in sentiment about the economy following Trump’s April 2 tariff announcement, with consumers reporting growing concerns about the job market and declining plans to purchase a home.
Still, homebuyers who are in a financial position to purchase a home could find the market shifting in their favor, with rising inventory offering them more choices and greater negotiating power.
“The number of homes for sale is rising in many markets, giving shoppers more choices than they’ve had in years,” says Realtor.com Chief Economist Danielle Hale. “Sellers are becoming more flexible on pricing, underscored by the price reductions we’re seeing, and while higher mortgage rates are certainly weighing on demand, the silver lining is that the market is starting to rebalance. This could create opportunities for buyers who are prepared.”
Further signs of a slow spring housing season
Pending sales activity dropped on an annual basis in April for the fourth straight month, putting the spring housing season on track for another year of historical weakness.
Total sales of existing homes were at their lowest level since 1995 last year, despite a notable bump in activity during the final months of the year.
Along with affordability challenges, housing experts had blamed the slowdown on a severe shortage of listings, particularly of existing homes with owners reluctant to give up their low pandemic-era mortgage rates.
Now inventory is rising, but buyers remain reluctant. A renewed rise in mortgage rates, back to levels seen in early 2024, is likely a key factor behind the slowdown.
Economic uncertainty could also be weighing on buyer demand, with Trump’s trade war spurring stock market volatility and fears of a recession.
New data released on Wednesday showed that the economy shrank at an annual rate of 0.3% in the first quarter of 2025. A recession is typically marked by two consecutive quarters of negative growth, accompanied by rising job losses.
“The economy isn’t in recession, but is on the precipice,” said Moody’s Analytics Chief Economist Mark Zandi in a post on X.
Affordability concerns continue to plague the housing market
The new monthly housing trends report estimates that a household now needs to earn $114,000 annually to afford a median-priced home. That’s up 70% from $67,000 just five years ago.
The sharp increase in income requirements has been fueled by both rising home prices and higher mortgage rates.
Median list prices in April were up 37% from five years ago, while 30-year mortgage rates averaged 6.73% last month, compared with 4.14% in April 2019.
In some markets, the income bar for homeownership is even higher. San Jose, CA, leads the nation, with an annual salary of $370,069 required to purchase a median-priced home, up 54% from 2019.
Following San Jose were Los Angeles ($315,892 salary required to buy a median-priced home), San Francisco ($263,023), San Diego ($258,926), and Boston ($232,095).
Although income requirements for homebuyers are up sharply from five years ago, they are little changed on the national level from last year, with both home prices and mortgage rates relatively steady from April 2024.
The national median list price for homes was $431,250 in April, an increase of just 0.3% from a year ago.
The median price per square foot rose 1.1% nationally, signaling modest home value growth.