The U.S. residential housing market is exhibiting early signs of stabilization following a prolonged period of decline. According to the National Association of Realtors® (NAR), existing-home sales in April 2025 experienced a slight uptick compared to the previous month, indicating a potential shift toward market equilibrium. However, despite these positive indicators, affordability remains a significant hurdle for many prospective buyers.
In April 2025, existing-home sales rose by 0.5% to an annual rate of 4.00 million units, marking the first monthly increase since the latter half of 2024. This uptick follows a 5.9% decline in March, which had been the slowest April performance since 2009. The median existing-home price in April reached a record $414,000, up 1.8% from the previous year. These figures suggest a modest recovery in sales activity and price appreciation.
Despite the positive trends, affordability continues to be a pressing issue. Households earning $75,000 annually can afford only 21.2% of home listings, a slight improvement from 20.8% the previous year but still significantly below pre-pandemic levels. This persistent affordability gap underscores the challenges faced by middle-income buyers in accessing homeownership.
The increase in home prices, coupled with elevated mortgage rates, has contributed to the affordability constraints. The average 30-year fixed mortgage rate has remained above 6%, influenced by fiscal concerns and credit rating downgrades. These higher borrowing costs have dampened purchasing power, particularly for first-time buyers.
Inventory levels have shown improvement, with the number of unsold existing homes rising by 9.0% from the previous month to 1.45 million units. This increase provides buyers with more options and may help alleviate some competitive pressures in the market.
Real estate experts remain cautiously optimistic about the market’s trajectory. While challenges persist, the stabilization in sales and inventory levels suggests a potential shift toward a more balanced market. However, addressing affordability issues will be crucial to ensuring sustainable growth and accessibility in the housing sector.