In the face of uncertainties regarding tariffs and the possibility of a recession later this year, would-be homeowners are behaving cautiously, according to a new survey.
In an index reading compiled by the National Association of Realtors, pending home sales nationally were up by 2%, although the numbers by region showed great fluctuation.
Describing the latest figures as a “modest monthly increase,” Lawrence Yun, chief economist with the NAR, said the numbers would most likely be substantially more positive were there a “meaningful decline in mortgage rates.”
Such a decline, continued Yun in a statement, would help both demand and supply: demand by boosting affordability, and supply by “lessening the power of the mortgage rate lock-in effect.”
While sales were marginally off by 0.9% in the Northeast, the market proved stronger in the Midwest with a 0.7% increase, and the South, which saw a healthy 6.2% jump.
The region reporting the direst sales figures was seen in the West, which has been strong for most of last year, where the trend line was off by 3%.
The NAR has predicted that mortgage rates will most likely average out to around 6.4% for the rest of the year, with a moderate decline to 6.1% in 2026. At the same time, it is thought that existing home sales will be up by 6% for the rest of 2025, with an impressive 11% gain forecast for next year.
The NAR is also forecasting a 3% increase in the median price of a home in 2025, improving to a 4% increase in 2026.
According to published reports, while higher mortgage rates and increased home prices are proving a current downer in the market, the prospect of more newly built homes becoming available may offset some of the price inflation.
April 11, 2025
By Garry Boulard
Photo courtesy of Pixabay
