NPR
Economic uncertainty has produced a double whammy for the housing market: sluggish home sales and plodding construction. Last month was the slowest April for existing-home sales in 16 years — a sharp rebuke to hopes that this spring the housing market would recover after two very sleepy years.
In a May survey of builder confidence conducted by Wells Fargo and the National Association of Home Builders, home builder sentiment dropped to a level last seen in November 2023.
The problem, as ever, is the cost of housing: Home prices are out of reach for many who would like to buy. And the tariff drama under President Trump has both made it more expensive to build new homes and made the future more unpredictable for would-be homebuyers.
The result is a country where builders want to build, and buyers want to buy — but the future is too much in doubt.
The first issue is a dip in demand. Lots of Americans would love to buy a home, but they simply can't afford to. Home prices are up nearly 50% since before the pandemic, and mortgage interest rates ticked up to 6.86% last week — a far cry from their pandemic low of 2.65% for a 30-year fixed-rate loan.
The median existing home sales price continued to climb nationally, to $414,000 — an all-time high for the month of April and the 22nd consecutive month of year-over-year price increases.
Home sales remain at just 75% of pre-pandemic activity, says Lawrence Yun, chief economist of the National Association of REALTORS®, despite the U.S. adding millions of jobs.
"Pent-up housing demand continues to grow, though not realized," Yun said in a statement accompanying April's disappointing sales figures. "Any meaningful decline in mortgage rates will help release this demand."