April Home Sales Dropped to Slowest Pace for That Month Since 2009

By Real News Hub Staff | May 24, 2025

Home sales in April fell to their slowest pace for that month since 2009, as persistently high mortgage rates and elevated home prices continued to sideline potential buyers from the housing market, according to data released by the National Association of Realtors.

Existing home sales dropped 1.9% from March to a seasonally adjusted annual rate of 4.14 million units, marking the weakest April performance since the depths of the Great Recession. Sales were down 7.7% compared to April 2024, extending a prolonged period of housing market weakness.

“The combination of high mortgage rates hovering near 7% and home prices that remain stubbornly elevated is creating a perfect storm of affordability challenges,” said Lawrence Yun, NAR’s chief economist. “Many potential buyers are simply priced out of the market or choosing to wait for more favorable conditions.”

The median existing-home price rose 5.7% year-over-year to $407,600, marking 132 consecutive months of price increases. Despite the slower sales pace, limited inventory continues to support price growth, with just 1.03 million homes available for sale at the end of April.

Housing inventory represents a 3.0-month supply at the current sales pace, well below the 4-to-6-month range considered balanced between buyers and sellers. The shortage of available homes continues to give sellers pricing power even as buyer demand weakens.

Mortgage rates, which averaged 6.81% for a 30-year fixed-rate loan in April according to Freddie Mac, have remained elevated despite expectations earlier this year that rates would decline. The Federal Reserve’s cautious approach to interest rate cuts has kept borrowing costs high.

“We’re seeing a market where sellers are reluctant to list their homes because they don’t want to give up their low mortgage rates from a few years ago,” explained Danielle Hale, chief economist at Realtor.com. “This creates a feedback loop that keeps inventory low and prices high.”

First-time homebuyers represented just 33% of sales in April, up slightly from 32% in March but still well below the 40% share that economists consider healthy for long-term housing market stability. The typical first-time buyer now needs an annual income of approximately $106,000 to afford a median-priced home.

Regional variations in the housing market remained significant, with the Northeast showing the largest year-over-year sales decline at 11.7%, while the West saw sales drop 8.9%. The South, which typically shows the strongest activity, experienced a 6.1% decline, and the Midwest saw sales fall 5.3%.

Cash purchases accounted for 28% of all transactions in April, up from 25% a year ago, indicating that buyers with substantial financial resources continue to have advantages in the competitive market environment.

The average time a home spent on the market was 22 days, unchanged from March but two days longer than the same period last year, suggesting that even in a supply-constrained market, homes are taking slightly longer to sell.

Construction of new homes has also slowed significantly, with housing starts falling to their lowest levels since 2020. Builders cite high construction costs, expensive financing, and uncertain demand as factors limiting new development.

“The housing market is essentially frozen,” said Greg McBride, chief financial analyst at Bankrate.com. “High prices and high mortgage rates have created a standoff where buyers can’t afford to buy and sellers can’t afford to sell.”

The challenging conditions have prompted some analysts to revise their forecasts for the housing market, with many now expecting continued weakness through the remainder of 2025 unless mortgage rates decline substantially or economic conditions change dramatically.

Pending home sales, which measure signed contracts rather than completed transactions, have also declined in recent months, suggesting that the weakness in existing home sales is likely to continue in the coming months.

The housing affordability crisis has become a significant political issue, with policymakers debating various proposals to increase housing supply and improve affordability for first-time buyers, though most experts agree that meaningful relief will require sustained policy efforts over several years.

Real estate professionals report that many potential buyers have shifted to rental markets or delayed homebuying plans indefinitely, contributing to increased demand and rising rents in many metropolitan areas across the country.