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While the U.S. housing supply shortage has started to ease, the price of the newly-added homes is not hitting the right notes for most potential buyers. A new study by the National Association of Realtors and Reator.com found that 40% of the nation’s top 100 housing markets are lacking enough affordable inventory for local buyers. For example, while strongest demand for housing is among buyers in the lower and middle price tiers, those with incomes of $50,000 could only afford 8.7% of the available listings in March, compared with 9.4% a year ago, and 27.8% in March 2019.

U.S. homeowners, particularly Boomers, are staying in their homes longer these days, and that is sending ripple effects through the entire housing market. According to Redfin, in 2024, the median time that homeowners lived in and owned their primary residence was 11.8 years, almost double the 6.5 years from 20 years ago. While the median own-time has come down from a high of 13.4 years in 2020, these high numbers mean there are fewer move-up properties and entry-level homes available for interested buyers.

During its two-day meeting ended May 7, 2025, the Federal Reserve decided to leave its target interest rate in the range of 4.25% - 4.5%. Even though the national inflation rate (2.4%) is close to the Fed’s ideal (2%), the economic uncertainty created by the Trump Administration tariffs made the Fed hesitant to add any more change to the mix. Meanwhile, the average rate on a 30-year fixed-rate mortgage was also unchanged this week, floating at 6.76% for the second straight week, according to Freddie Mac.

The median U.S. monthly housing payment reached an all-time high at the end of April, climbing to $2,870, according to Redfin. Rising prices and higher mortgage rates are pushing payments up, resulting in fewer buyers pulling the trigger on contracts, with mortgage-purchase applications falling 6% month-over-month. New listings have increased annually by 6.1% however, and added inventory could release some of the market price pressure in coming months.

The number of applications for U.S. home loans declined this week, even though mortgage interest rates fell for the second week, according to the Mortgage Bankers Association. Both home purchase loan applications and refinance requests decreased 4% during the week ended April 30, 2025, while the average rate on a 30-year fixed-rate mortgage sank to 6.89% from 6.90%. The MBA blames buyer hesitancy on uncertainty about the broader economy.

The difference between what home sellers are asking and what buyers are actually paying has increased to an almost 5-year high, according to Redfin. In March, the median national asking price was $469,729, or 9% higher than the actual median sale price of $431,057. Redfin says the divergence is a result of housing market dynamics shifting toward buyers thanks to increased inventory, but sellers being slow to adjust.

Available U.S. homes for sale reached 1.15 million units in March, a 19% increase over last year, and the highest level since 2020. March inventory rates were just 24% below pre-pandemic averages for that month, a marked improvement from the last two years in March. However, even with lower mortgage interest rates and more property choices, sales were essentially flat year-over-year with only 265,000 pending sales during March, 110,000 fewer than were added to the market.

In the wake of tariff uncertainty, long-term mortgage interest rates jumped more than 20 basis points during the past week, according to Freddie Mac. The average rate on a 30-year fixed-rate mortgage skyrocketed to 6.83% during the week ended April 17, 2025, up from 6.62% the week before. However, the new average was lower than a year ago when it was 7.1%. Freddie Mac says with homebuyer demand 13% higher this year and a lower rate, the spring buying season is off to a strong start.

U.S. foreclosure activity rose 11% during the first quarter of 2025, after three straight quarters of declines, according to real estate data company ATTOM. However, the 93,953 properties in some stage of foreclosure from January to March 2025 actually represented a 2% decrease from a year ago. Foreclosure starts – new foreclosure proceedings – were up 14% from the previous quarter and 2% compared with last year. Kansas saw the sharpest increase with a 117% annual jump, followed by Delaware at 58% and Oklahoma at 45%.

Even with the a few days of rate spikes thanks to the Trump Administration tariff chaos, long-term mortgage interest rates averaged lower this week than last, according to the Freddie Mac. The average rate on a 30-year fixed-rate mortgage slipped down to 6.62% during the week ended April 10, 2025, from 6.64% the week before. This marks three consecutive weeks of declines. The current rate is also down on an annual basis from the same week in 2024 when it averaged 6.88%.

While the majority of the top 200 U.S. markets are still struggling to provide enough inventory to meet demand, there are now 58 metro areas where the dynamics have shifted back to pre-pandemic levels. Many of the regions that are now leaning towards buyer’s markets are clustered in the Gulf Coast and Mountain West, areas flooded with out-of-state buyers during the pandemic years. At the top of the list is the Kileen-Temple, Texas market, where available inventory is now 93% higher than its March 2019 level. The rest of the top five areas include Punta Gorda, Florida; Lakeland-Winter Haven, Florida; Colorado Springs, Colorado; and Ocala, Florida.

Long-term mortgage rates fell dramatically Thursday in response to the Trump Administration tariffs that went into effect on Wednesday, according to Mortgage Daily News. The average rate on a  30-year fixed-rate mortgage fell 12 basis points to 6.63% during the week ended Thursday, April 3, 2025, down from 6.75% the week before and falling to the lowest level since October. The drop in rates could be a big boost to the spring housing market, where new listings jumped 10% annually in March.

U.S. homebuilders have completed plenty of houses that still have no buyers, according to data from the U.S. Census Bureau. As of February 2025, there were 119,000 newly finished but unsold homes across the country, up from 88,000 a year earlier and the highest level since 2009, when the market was reeling from the great housing crash of 2008. High mortgage rates and higher home prices are currently holding buyers back from closing on today's empty inventory.

The number of mortgage applications for purchasing a home increased 1% this past week, pushing demand to its highest level in two months, according to the Mortgage Bankers Association. Home purchase applications also increased 7% from this time last year. However, applications for mortgage refinance loans fell 5% this last week, as mortgage rates were essentially unchanged this week.

Even as mortgages rates remained elevated and more inventory came on the market, U.S. home prices continued to rise in January. The seasonally adjusted S&P CoreLogic Case-Shiller Index increased 0.6% in January from the month before. Home prices also rose 4.1% compared with the year earlier. The continued upward climb of prices indicates that there is enough homebuyer demand, especially from repeat buyers with lots of current equity, to overcome higher rates to some extent.