National Market Insights - May 2025
We expect that the index below will indicate a substantial decline in May, but it illustrates the tremendous scale of "economic policy uncertainty" that struck in April, deeply affecting stock markets, consumer confidence and housing markets.
March and April saw enormous declines in major stock market indices, with very negative impacts on household wealth and consumer economic expectations for the future, and unsettling many home buyers and sellers. Then in late April and May, stock values rebounded in similar scale to their shocking declines, which we expect will lift housing markets.
Long-term reviews of 30-year mortgage interest rates and the Fed's interventions: Amid the extreme volatility of political and economic developments so far in 2025, interest rates have not significantly declined, as was hoped for. Bond markets are unsettled by national debt issues, and the Fed, still concerned about future inflation, once again left its benchmark rate unchanged.
Median house and condo/co-op sales price rose moving deeper into spring - as is the typical seasonal trend - and ticked up on a year-over-year basis, though the y-o-y increases are getting smaller. Note that appreciation trends often vary, sometimes widely, between regional submarkets. More often than not, national median sales prices peak for the year in June.
The number of new listings in April 2025 was the highest monthly count in almost 3 years. Clearly, the "mortgage lock-in effect" continues to fade as sellers decide to move forward with life plans.
The biggest change in market dynamics has been the increase in the quantity of homes on the market. April 2025 saw the highest monthly count in 5 years - though still running lower than pre-pandemic norms.
While the supply of listings has climbed, the number of homes sold in April fell slightly year over year, though following the normal seasonal trend, sales did rise from March. As illustrated, sales volume usually hits its annual high in May or June.
Months-supply-of-inventory (MSI) compares buyer demand to the inventory of listings for sale: The lower the reading, the more heated and competitive the market. Since the increase in supply has outpaced the change in sales activity, MSI has risen: In April, the reading was the highest since early 2020.
Price reductions have risen in both number and in percentage - the latter is illustrated below - to their highest month-of-April readings in 7+ years. Correct pricing, preparation and marketing are imperatives for sellers in a market in which buyers - already affected by economic volatility - have more homes to choose from.
As buyers focused on the spring rush of new listings, median-days-on-market dropped. The homes that sold in April went into contract faster than in March, but a few days slower than in April 2024.
A considerable proportion of buyers are still purchasing their new homes with cash.
