The spring housing market is showing a mix of encouraging signs and ongoing challenges. While home sales are not surging, they are holding relatively steady, and improving affordability may create opportunities for buyers who have been waiting on the sidelines.
Existing-home sales in April were nearly unchanged from the previous month, rising just 0.2%. Compared to the same time last year, sales activity was essentially flat. This signals that buyer demand is still present, but limited inventory continues to keep the market from moving more aggressively.
Affordability Is Showing Signs of Improvement
One of the more positive developments is that housing affordability has improved compared to last year. Mortgage rates have eased from where they were a year ago, wages have continued to rise, and home price growth has slowed significantly.
The median price of an existing home increased by less than 1% year over year in April, a much more moderate pace than what buyers experienced in recent years. This cooling in price growth, combined with stronger wages, may give some buyers a little more breathing room.
First-time buyers are also making up a larger share of the market, representing one-third of existing-home purchases in April. That suggests some buyers are finding ways to re-enter the market despite affordability concerns.
Inventory Remains the Biggest Constraint
The main issue holding the market back continues to be the limited number of homes available for sale. Inventory did increase slightly in April, but overall supply remains tight compared to what would be considered a more balanced market.
Because there are still not enough resale homes available, well-priced properties can continue to attract attention. Multiple offers are still happening, although not at the same intensity seen during the pandemic-era market. At the same time, homes are taking a little longer to sell, which suggests buyers are being more selective and taking additional time before making decisions.
New Construction Is Attracting More Buyers
With resale inventory still limited, many buyers are turning their attention to new construction. Sales of newly built homes have recently picked up, and builders are working harder to attract buyers with incentives such as mortgage rate buydowns, closing cost assistance, upgrades, and design credits.
Interestingly, the median price of a newly built home has recently been lower than the median price of an existing home, which is not historically the norm. This shift, combined with builder incentives, is making new construction a more appealing option for some buyers.
What This Means for Buyers and Sellers
For buyers, the market is becoming slightly more favorable than it was a year ago. Prices are not rising as quickly, affordability has improved modestly, and there may be more negotiating opportunities depending on the home and location. However, inventory is still limited, so buyers should be prepared to act when the right property becomes available.
For sellers, demand has not disappeared. Homes that are priced correctly and presented well can still generate strong interest, especially in areas where inventory remains scarce. However, today’s buyers are more cautious, so overpricing can lead to longer days on market.
The Bottom Line
The housing market is not booming, but it is not stalled either. Sales are holding steady, affordability is improving, and buyer demand remains intact. The biggest challenge continues to be inventory. Until more homeowners decide to sell, the market is likely to remain competitive in many areas, while buyers continue exploring both resale and new-construction opportunities.
