and Inventories Jumped
* Existing home sales dropped 0.5% in April, against expectations for a rise.
* Both single-family and condo/co-op sales fell on the month and over the past year.
* Monthly sales declined in the Northeast and the West, were up in the Midwest, and were flat in the South; sales declined from last year in all regions except the Northeast.
* Housing inventory rose for a fourth consecutive month in April.
* Median sales price growth remained positive on a year-ago basis, but continues to slow.
* Low inventory and a lack of supply are keeping home prices elevated in early 2025.
* PNC expects elevated mortgage rates and a softening labor market to limit growth in existing home sales in 2025.
Total existing home sales fell for a second straight month in April, down 0.5% to 4.0 million units at a seasonally-adjusted annualized rate, according to the National Association of Realtors (NAR). Existing home sales remain near historic lows in April 2025, and are considerably below the pre-pandemic peak of 5.6 million. Sales fell off a cliff in early 2022 after mortgage rates moved higher, remained below 4.5 million in 2023, and dipped to a 14-year low in September 2024. There was a slight rebound in late 2024 and early 2025, but that momentum has faded. On a year-ago basis, total existing home sales fell 2% in April. Regardless of home type, existing home sales are near record lows in April 2025, weighed down by a 30-year fixed mortgage rate near 7%.
Existing condo/co-op sales dropped 2.6% to 0.37 million units in April, and single-family home sales declined a narrow 0.3% on the month to 3.63 million. Both were down from last year, with multifamily homes down 7.5% and single-family homes down 1.4%.
Monthly sales fell in the Northeast (down 2%) and the West (down 3.9%), and increased in the Midwest (up 2.1%). Sales in the South remained unchanged from last month, at 1.81 million units. Sales were down in all regions from a year earlier except in the Northeast, where they were flat. The largest year-over-year drop was in the South, down 3%. Sales dropped around 1% in both the West and Midwest.
The inventory of total existing homes increased for a fourth consecutive month to 1.45 million units, jumping 9% in April and 21% from the same time last year. The supply of all existing homes for sale increased from 3.2 months at the current sales pace in December to 4.4 months in April, the highest over the past three years. The supply of condos and co-ops has increased to over 6 months.
The median seasonally-unadjusted sales price was $414,000 in April, an increase of 1.8% year-over-year. This is down from close to 6% growth in December as inventories have climbed. With strong cumulative house price growth since the pandemic and the 30-year fixed mortgage rate close to 7%, housing affordability is near a record low. Rising inventories will continue to put downward pressure on price growth in the near term.
The average 30-year fixed mortgage rate was close to 7% in May, and remained elevated from a few years ago when rates were around 3%. PNC expects elevated mortgage rates and a rising unemployment rate to remain a drag on existing home sales in 2025. Tight credit conditions will likely limit growth in existing homes sales over the near term. Tariffs remain a risk for inflation, and less monetary easing from the Federal Reserve than expected could keep mortgage rates high and further weigh on the housing market.
PNC Bank, National Association, is a member of The PNC Financial Services Group, Inc. (NYSE: PNC). PNC is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management.
