Real Estate Rundown May 2025
May 01, 2025
Photo Courtesy of Getty Images via Unsplash
Home Prices Growth Begins to Slow
In March, U.S. home prices increased just 0.2% from the previous month—the slowest growth since December 2022—while annual price growth slowed to 4.6%, marking the 11th straight month of deceleration, according to Redfin's Home Price Index. The moderation in price gains is due to weakening homebuying demand, which is not keeping pace with the growing number of listings. Although some Midwest markets remain resilient, overall buyer hesitancy—fueled by economic uncertainty and new tariffs—is leading to slower sales and longer listing times. Redfin's Senior Economist notes that while this may signal further price softening, it could benefit buyers currently in the market by offering more negotiating power.
Pending Home Sales increase
Pending home sales surged 6.1% in March, marking the largest monthly increase since December 2023 and signaling a potential rebound in the housing market, according to the National Association of REALTORS®. This upswing follows a dip in existing-home sales and is attributed to a slight drop in mortgage rates and growing job numbers. The South led the gains with a 10% rise in contract signings, while the Midwest and West also saw increases; only the Northeast declined. Rising inventory—up 8.1% month-over-month and nearly 20% year-over-year—is helping unlock more buyer activity. While not all pending contracts will close, the data suggests increased buyer engagement heading into the spring homebuying season.
Sales of Existing Homes Plunge
Existing-home sales fell sharply by 5.9% in March compared to February, marking the slowest March pace since 2009 and signaling challenges for the spring housing market, traditionally the busiest season for real estate. Sales were also down 2.4% from a year ago, despite the median home price reaching a record $403,700 for March. High mortgage rates and economic uncertainty, worsened by new tariffs, have dampened buyer demand, although inventory levels rose 8.1% month-over-month and nearly 20% year-over-year. All U.S. regions saw sales declines, though rising inventory offers buyers more negotiating power. Sellers remain confident, but economists warn that 2025 may hinge more on buyer readiness than supply.
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