Weekly pending home sales were disappointing in the last week of April, showing a 10% decrease compared to the same week in 2024.
Specifically, single-family home sales were 8% lower than the previous year, while condo sales saw a 19% decline. Nationally, there was only a slight rebound in weekly pending home sales after the Easter holiday two weeks prior.
Not only were transaction counts affected, but prices also appeared soft last week. The median price of weekly pending sales was below the same week in the previous year.
This marked the first negative year-over-year reading in nearly two years, indicating a week of negative home prices on a national level.
While one week does not establish a trend, it is worth noting that this negative reading follows a year of slowing annual home price changes. Mortgage rates slightly decreased during the week, making the typical mortgage payment nearly 6% cheaper for homebuyers compared to a year ago. Despite this, the average 30-year fixed-rate mortgage remains close to 7%, providing little incentive for hesitant potential buyers.
Meanwhile, the rate of unsold new listings surged in the Northeastern states. Connecticut, New York, Massachusetts, New Jersey, and Pennsylvania all experienced significant increases in new listings following the Easter holiday. These states have had limited inventory and new listings, with some areas still struggling to surpass the shortage levels experienced during the pandemic crisis.
Therefore, any growth in seller volume in these states is a positive development. It remains to be seen whether this trend will continue.
Weekly Pending Home Sales
Each week, we monitor every home that receives an offer and enters into a contract across the country. Typically, homes take 30 to 40 days in contract before finalizing the sale. While not every home in contract will ultimately close, this number serves as a reliable indicator for future home sales, which will be in the spotlight in a few months.
Home sales were notably sluggish at the end of April.
Only 71,000 new contracts were counted for single-family homes during the week, representing a 4.6% increase from the previous week (which included the Easter holiday) but an 8.7% decrease from the same period in 2024.
The chart illustrates that this year’s performance has fallen below that of 2024 for a couple of weeks. While the previous week’s results were expected due to the late Easter holiday, the subsequent week did not show the anticipated rebound.
It is anticipated that next week’s home sales will slightly outperform 2024. Last year at this time presented challenges, with mortgage rates climbing to 7.5%. As we approach next week, the year-over-year comparisons will become more favorable. Additionally, we have yet to reach the seasonal peak of buying activity, which is likely to occur later in May 2025. Therefore, we can expect several weeks of increasing transaction counts until the market pauses again during the Memorial Day holiday.
The key takeaway regarding home sales is that while April began with growth over 2024, it concluded with fewer sales.
May is expected to see mostly higher home sales than the previous year. Any indication of only 72,000 weekly pending home sales next week would be a bearish signal, and it will be highlighted accordingly. Stay tuned for updates.
Home Prices
In addition to the decline in transaction volume, prices also saw a softening trend. The median price of newly pending home sales last week was $395,000.
This figure represented a 1% decrease from the previous week, with home prices also lower than the same period in 2024.
For the past few years, the narrative has been that while home sales were low, home prices continued to rise on a year-over-year basis. Prices continued to climb even as demand weakened significantly over recent years.
The reason for this price increase was the limited supply of homes available for purchase. With very few new listings each week and restricted levels of unsold inventory nationally, prices continued to rise.
Now, after three years of increasing inventory, we have finally moved past the shortage phase. However, demand has not fully recovered, resulting in rising supply impacting prices.
The chart depicting the weekly pending home sales prices displays how despite slow sales, prices remained elevated in 2024 compared to 2023. Prices continued to rise during that period.
Similarly, this year’s trend (purple line) consistently stayed slightly ahead of last year. However, the most recent reading at the end of April showed a dip below the previous year. In 2024, the median price of single-family homes newly pending was $399,000, while this year it stands at $395,000.
While one week does not establish a trend, prices are anticipated to rebound slightly in the coming week. Nevertheless, any negative year-over-year reading in home prices is uncommon. The market experienced a similar adjustment in 2022 when prices dipped. While one week does not signify a trend, the current reading does not bode well.
Leading indicators of future sales, such as the median list price and the price of new listings, have seen slight increases and are running approximately 2–3% higher than last year. This suggests that we are aiming for an average zero percent change in home prices across the country. The critical factor to monitor in home prices is any significant shock. For instance, if mortgage rates were to spike as they did with tariff announcements a month ago, home prices would be highly vulnerable.
Inventory
With home sales declining, inventory experienced a 2% growth last week, marking a solid rebound post the Easter holiday.
While there are still limited sellers in most parts of the country each week, slow sales contribute to an increase in unsold inventory.
As mentioned earlier, the supply of homes on the market has finally reached levels that impact prices. In fact, there are currently more homes on the market than at any point since before the pandemic.
Although inventory has been rising across the Sunbelt, the focus is now shifting to the Northeast to determine if this region is catching up in terms of supply. Moreover, there is still an entire summer of inventory growth ahead, indicating that this narrative is far from over.
The purple line in this chart represents the 2025 inventory curve, showing 744,000 single-family homes unsold on the market nationwide. This figure is 33% higher than last year and surpasses the peak inventory of 2024, which occurred in October. It also exceeds the April 2020 levels when inventory began rapidly decreasing due to the pandemic-induced demand surge.
From this perspective, it is evident that 2025 will mark the end of the pandemic-induced shortage that has persisted for five years. This signals a new era and necessitates revised assumptions about the housing market.
New Listings
There were 78,000 new listings for unsold single-family homes across the country last week, representing a 10% increase from the previous year. This growth followed a 12% rebound post the Easter holiday.
However, the actual number of new listings was slightly lower than anticipated. Expectations were set at 80,000 new listings, but the actual figure fell short at 78,000. The upcoming week’s data will be closely watched to see if the 80,000 threshold is reached for the first time.
While new listings saw a 12% rebound, sales only increased by 5%. There is potential for new listings to continue accelerating. One point of interest in the new listings data is whether slow sales impose a limit on new listings. If individuals are hesitant to buy a new home, they are unlikely to list their current property for sale.
Therefore, if new listings plateau and revert to levels seen in recent years, it would be a bearish signal for the housing market. Such a scenario would be unfavorable for housing overall.
The chart above shows this year’s weekly new listings (purple line) approaching the levels seen in previous years. The end of April fell short of the 80,000 mark, resulting in a downward trend in the purple line. The following week will reveal if growth resumes.
Moreover, the number of immediate sales following new listings has significantly decreased compared to recent years. Only 15,000 new listings went under contract immediately after being listed at the end of April.
Overall, there were only about 1% more sellers compared to the previous year at this time. This could indicate a cooling off period for both buyers and sellers. Should this trend continue, it would not bode well for the housing market.
Price Reductions
As inventory grew and transactions faltered, there was a noticeable increase in price cuts at the end of April.
The percentage of homes on the market with price reductions rose by 60 basis points to 36.5% of the market. The 2025 line remains elevated compared to recent years, indicating weaker home price pressures than seen since 2022.
Price reductions can shift when demand picks up. A decrease in mortgage rates, similar to what occurred in September last year, could prompt buyers to act, make offers on homes, and flatten out the uptick in demand. However, there are currently no signs of such a scenario unfolding. This trend underscores the ample supply of unsold homes impacting prices.
In conclusion, the surge in price reductions aligns with the overall message from the recent data. Home sales were disappointing at the end of April, with both sales and prices experiencing declines. Consumers are waiting for conditions to improve, which have yet to materialize.
These are the key insights from the latest data. The housing market is evolving rapidly, and for those needing to stay informed, joining us at HousingWire and Altos Research is highly recommended.
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