According to a joint report released This Week in Real Estate from the U.S. Census Bureau and the Department of Housing and Urban Development, new home sales surged in April, reaching their highest level in over three years. Sales of newly constructed single-family homes increased by 10.9% compared to March and were up 3.3% year-over-year. In contrast, existing-home sales experienced a modest decline, falling 0.5% from the previous month and 2% compared to April 2024. Home prices continued to rise, albeit at a slower pace. The median sales price for existing-homes reached $414,000, an all-time high for April. This represents a 1.8% year-over-year increase, though it also reflects the slowest pace of annual price appreciation since July 2023. Mortgage rates edged slightly higher last week, with the average 30-year fixed-rate mortgage rising to 6.86%, up from 6.81% the previous week. Despite the uptick, rates remain below the 6.94% average recorded during the same period last year. Fannie Mae has revised its 2025 home sales forecast upward, now projecting 4.92 million total sales, an increase from the previous estimate of 4.86 million. Below are key events from the third week of May impacting our business:
HOME SALES FORECAST UPGRADED IN MAY OUTLOOK. Total single-family home sales are expected to close 2025 at 4.92 million units, up from 4.86 million in its prior forecast, with existing home sales accounting for 4.24 million of those units, according to the May 2025 Economic and Housing Outlook from the Fannie Mae Economic and Strategic Research (ESR) Group. Revisions to the home sales forecast were driven in part by the ESR Group’s lower expectations for mortgage rates, which it now forecasts to end 2025 and 2026 at 6.1% and 5.8%, respectively, down from 6.2% and 6.0% in its prior forecast. Mortgage originations are projected to rise to $1.99 trillion and $2.38 trillion, respectively, for 2025 and 2026, compared to our previous forecast of $1.98 trillion and $2.33 trillion, respectively. Read the full story here.
VOLATILE SPRING SELLING SEASON CONTINUES. The Census estimate of new home sales posted an unexpected gain in April even as builders and consumers continue to deal with economic uncertainty, elevated interest rates and rising building material costs. Sales of newly built, single-family homes in April increased 10.9% to a 743,000 seasonally adjusted annual rate from a downwardly revised March number, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in April was up 3.3% compared to a year earlier. A less volatile look at the market would be the year-to-date figures, which show new home sales are down 1.2% thus far in 2025 on elevated interest rates, ongoing policy uncertainty and rising construction costs. Rising inventory in the resale market is likely to place pressure on both pricing and sales activity for home builders during the second half of the year. The April new home data reflects this as new home inventory is leveling off near a half million of residences marketed for sale, up just 1.6% from January. Read the full story here.
EXISTING-HOME SALES EDGED LOWER BY 0.5% IN APRIL. Total existing-home sales slipped 0.5% from March to a seasonally adjusted annual rate of 4.00 million in April. Year-over-year, sales descended 2.0% (down from 4.08 million in April 2024). The median existing-home price for all housing types in April was $414,000, up 1.8% from one year ago ($406,600). Single-family home sales waned 0.3% to a seasonally adjusted annual rate of 3.63 million in April, down 1.4% from the prior year. The median existing single-family home price was $418,000 in April, up 1.7% from April 2024. “Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand,” said NAR Chief Economist Lawrence Yun. Total housing inventory registered at the end of April was 1.45 million units, up 9.0% from March and 20.8% from one year ago (1.2 million). Unsold inventory sits at a 4.4-month supply at the current sales pace, up from 4.0 months in March and 3.5 months in April 2024. “At the macro level, we are still in a mild seller’s market,” Yun said. “But with the highest inventory levels in nearly five years, consumers are in a better situation to negotiate for better deals.” Read the full story here.
