Inventory Rising, Sales Falling: Is April 2025 the Market’s Breaking Point?

April’s housing data tells a complex story: inventory is at a five-year high, sales are slipping, and home prices continue to defy gravity—at least for now. In this week’s episode of Mortgage, Markets, and More, Peter D’Angelo breaks down the latest NAR report and what it means for buyers and sellers heading into summer.

National trends reveal persistent affordability pressures and regional price divergence, while New Jersey’s market shows both strength and subtle signs of softening. With more first-time buyers entering and investors pulling back, is the tide finally turning?

Plus: Why rate stability—not cuts—might be the key to unlocking housing momentum, and what Northeast data reveals about where we're headed next. 🏡📉📈

#RealEstate2025 #HousingMarketUpdate #MortgageRates #HomePrices #RealEstateNews #FirstTimeBuyers #NARReport #NewJerseyRealEstate #InventoryGrowth #MarketTrends

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Peter D'Angelo | NMLS: 885309 | Branch Manager | Guaranteed Rate, Inc., NMLS 2611
Peter.DAngelo@Rate.com

*All information, topics, discussion is my own personal opinion and insight, not reflective of Guaranteed Rate, Inc. May contain market information for informational purposes only, not to be used as financial advice.

Transcript

Podcast_05.28.2025-NAR_April
[00:00:00] 
 
 
Welcome back to Mortgage Markets and More. I'm your host, Peter D'Angelo. I hope you're doing well. I've got your National Association of Realtors existing home sales data update from April of 2025, and there's a lot of contradictions. We're seeing that there's inventory growth, [00:01:00] home prices are still going up, but sales are declining.
Let's unpack everything. We're gonna take a big. Scope, view of the whole country, and then we're gonna kinda laser it focus down into our local market here in New Jersey. This data that we're getting from the National Association of Realtors is only going to give us information for the northeast region, but the northeast region, which comprises the New York Metro area, New Jersey, New York.
It's going to give us a good enough example of what we're feeling in the marketplace when we're out and about. So we're gonna take a look at that together. So we'll start off with the top headline information, sales Annual Growth Rate. Now this is seasonally adjusted, was 4 million units sold in April of 2025.
It's a little bit less than what they were expecting. Analysts were expecting 4.15 million home sales seasonally adjusted. We missed that number a little bit. So there's a little bit of a decline [00:02:00] there, which is a three month decline. When we compare year over year, uh, the sales are just about 75% of the pre pandemic norms, despite the fact that in the past three years we've seen, according to the Bureau of Labor and Statistics.
7 million new jobs added, so we have more capability is what we can assume by that, but it's not really showing us by way of the volume and activity that we see in a normal, healthy market just yet likely due to those affordability challenges that continue to persist. The interpretation of what we're seeing by way of this volume is that.
We're so constrained by the inventory side of the equation, but economic growth is showing some good signs, but that's not translating yet into housing inventory and more normal due course of sales [00:03:00] in real estate. Now, even though we're seeing that home prices are still going up. There is a tide that's shifting.
So when we're looking at the national median sales price, $414,000 is what that number is. As of this report from the National Association of Realtors, that's up 1.8% year over year for those keeping track at home when we've been doing these, this is our 22nd month straight. Of year over year, median home sale price increase.
There is a divergence happening though, that's looking at the whole country. When we look at the north, northeast, and the Midwest, I should say, we're seeing that. There's home value appreciation happening pretty steadily still. When we look at the south and the west, that's how the National Association of Realtors breaks down that data.
Well, those home values, we're starting to see some softening in those prices. Not the [00:04:00] same growth and some compression in some markets where home values are down a little bit compared to last year, what is this telling us overall? Well, the Northeast and the and the Midwest. So these two market areas normally lag behind the other two.
When we look at the West and the South, historically those markets lag because there seems to always be a little bit more demand. A little more appetite and a little bit more capability in those markets. A little bit more insulated from possible economic activity that would be negative. You know, if there's job losses and things like that that could be setting the stage and giving us a clue that moving forward we could start to see the same softening, but the only tangible difference that's very important.
Is the fact that in the Northeast and the Midwest, the inventory is still constrained. So with pent up demand that continues [00:05:00] to get pent up month after month and year after year, there's just going to be built into those markets, more buyers. So as long as there's gonna be buyers to pay, the prices will have a little bit more resiliency when compared to the other regions.
Now we did see a little bit of an inventory surge. It's not being reflected much in the sales data, but there, this is still good news and, and sh showing signs of progress. The inventory, and this is not seasonally adjusted, 1.45 million units. That's how much is available for sale in the country right now.
That's up 9% month over month. That is also showing us 20.8% improvement compared year over year. So comparing April to April, 2024, quite a bit more inventory. That is a good sign. It's something desperately needed, but where that inventory is. Is important. Again, these are national numbers, so if there's a lot of [00:06:00] inventory in, let's say the south and the west, which is actually where most of that inventory is coming from, well those are markets that are softening.
That makes sense. The supply side of the equation is higher overall. Looking at the whole country, this is the highest level of inventory we've seen in five. Years good news. So the, there's good progress happening here. This is what we want to be seeing so that there could be more opportunity for those who could be out there Shopping and more inventory will precipitate more inventory.
And follow me here on this, if we have more inventory and more opportunities. For properties to purchase those sellers that have been on the fence about possibly selling their home because they're concerned about where they're going to move to. Well, if inventory starts to increase, they're going to probably have a little bit more peace of mind.
And if you are one of those perspective sellers, these are signs that maybe it would be good to start [00:07:00] exploring what selling and buying would look like, because perhaps there could be more inventory becoming available that could be more opportunity for you. Looking at the months of supply. So this is when we take into account how long uh it takes to close on a transaction and what the normal course of business is during a time period.
We're looking at 4.4 months of supply that is still lower than what we would call a balanced or healthy market that normally sits around six months supply, but this is still improvement. We're up from four months in March of 2025 and. Also up from three and a half months, which was the reading that we had in April of 2024.
Again, good data points. We're making good progress. We're moving in the right direction here. The market classification, if we're gonna say buyer's market or seller's market, mildly now a seller's market when we're looking at the whole country. Now let's take a look at [00:08:00] the composition of the buyer. I always love looking at this because it tells us.
What the competition's like out there if you're going to purchase a home. So first time home buyers, they accounted for 34% of the sales in April of 2025. That's the best showing for our first time home buyers in over a year, so that's great. That's also telling us something that's telling us that the first time home buyers.
Are not being out competed in the marketplace and they are winning, which could tell us that there's some softening on the appetite for people purchasing, particularly the investors, and those going for luxury purchases like second homes and vacation homes or investment properties. So now let's go to the cash buyers.
That's typically your investor cash buyers. Comprise 25% continuing downward trend that we've been seeing month over month. So less people are using all cash to purchase and there's a bit more on the first time home buyers and of [00:09:00] those cash purchases. As well as financing. So this number includes both 15% of these sales were investors.
So these are people who are purchasing property, not with the intention of residing in the property, strictly purchasing as an investment vehicle. And that is flat compared to March, but also down year over year. So there's been less investor activity. It remains to be seen. Why I could conjecture a lot of the headlines and tariff talk and things that people aren't unsure about what's going to be happening next for the economy and what the impacts for inflation are.
They may be a little bit more conservative now and they may be pulling back. That creates opportunity, so if you are someone who's looking to sell and buy, or you're a first time home buyer, opportunity is being presented now, which is great. Of all of the sales. We also take a look at the, the distressed sales.
These are homes that are in pre-foreclosure, so they're about [00:10:00] to be foreclosed upon, or they're a short sale means that they over levered the property, the, uh, current owner owes more than the property's worth or that they're selling it for. So that was 2% of all of the sales for April that. Is flat, which is actually a positive sign for the, for the market.
So that means we didn't see an uptick in distress sales. That's something to keep our eye on. That's why I like to share that we start to see an uptick in distress sales. That could be a bit of a warning sign and a red flag for, for the real estate market, but we haven't seen that happening. Now we're gonna deep dive into the Northeast and into New Jersey like I had mentioned.
So the Northeast is still holding steady year over year, and it's the only region out of the four main regions. We've got the Northeast, the Midwest, the South, and the West. And of those regions, the Northeast is the only one remaining fairly consistent with. Price appreciation and inventory, but the inventory's [00:11:00] lagging when it comes to the growth that we're seeing in the other regions.
Uh, the northeast median sales price. So to compare median sales price throughout the whole country right now, $414,000 in the northeast median sales price, $487,400. That's up 6.3% year over year. If we zoom into New Jersey and get a little bit more specific, prices are up around 6.9% as of this last report, and that brings our median sales price in New Jersey to $545,300.
So as you can see, New Jersey, even though it's part of the Northeast region, is likely pushing up that average. Probably along with other New York metro area markets, so New Jersey, New York, and Massachusetts Housing, Boston as a large metro area. These are your, your hotbeds that are likely keeping that home meaning and home price up and keeping that, uh, [00:12:00] value appreciation, consistent.
That being said, home values are up, but the actual sales are down 11.6% year over year in New Jersey. This is due to the constrained supply and therefore there're not being as much volume of activity. The market behavior right now is that there's about 53.6% of homes. That are sold above list price. That is down year over year, so we could start seeing a market where there's negotiation occurring Again, we don't have to assume that if you're a buyer in New Jersey, it's open house best and final by Monday at 12:00 PM.
The tide may be shifting as we were noticing from the regional trends, so that that's good sign for the buyers out there. A little bit of a softening for the sellers. The price reductions are rising though, and that's continual, you know, something to keep our eye on with that too, because with price [00:13:00] reductions, it means the homes aren't being listed at a price that's appealing enough for the right buyer appetite, so they lower the price.
What I can speak to with price reductions and what I'm seeing and where the rubber meets road. It's become very common. I'm gonna say even particularly in Bergen County, Hudson County, looking at the data where homes are listed higher, then there's a price reduction, and the price reduction I think has a psychological impact that actually calls people's attention.
Like, oh, I'm getting a deal. This home went, you know, is going for lower now. So then they go and they see the property and maybe they place a bid. A lot of the times when we see these price reductions, price reductions occur, and then the home gets sold for what the original list price was. I don't think that's happened probably more than 15 times in the past couple months from what I've been seeing when I've been helping families in their, you know, pursuit of purchasing a home.
And so price reductions, that doesn't necessarily tell you that there's a softening happening. Could be a market. [00:14:00] Strategy. Um, but the fact that there are price reductions, there's 19.7%, uh, have had price reductions, and that's compared to only 13% last year. So we've got a couple indications of softening here in New Jersey and the median days on market for the whole state is 34 days.
That's a little bit more routine. Uh, we've been seeing that. Wax and wane going back and forth, but that's pretty healthy. So that's not really giving us anything super useful right now. I'd say the other information's more important as we look ahead now, the rate volatility, we can't ignore that part of the conversation.
The rates are what creates the affordability and how much someone is going to be paying for that home. So as long as rates are going to remain a little bit more volatile, the the bad news is they have been going up. But the good news is they're staying what we call range bound. So we're not seeing them [00:15:00] swing from 6.5% all the way up to 7.5%, but we are seeing them move up and they will come down a little bit depending on what happens.
Depends on the headlines. It depends on a multitude of things, but as long as we can stay range bound, we'll be good. I've said this so many times. I don't believe that we need lower interest rates, at least not immediately. I think what would be most appropriate first is if we have some stability in the interest rates, because it's really difficult to manage your home shopping experience if you know what your maximum budget is and we throttle that, and then you go out, and then if interest rates go up, even a quarter of a percent, that could have more implications on your closing costs.
If you wanted to still keep the lower rate and pay discount points for a lower rate, that's something that you need to. Be considerate of. Also, if you, if that's not an option, then it may mean changing your buying power. So if rates could stabilize a little bit more, then we'd be [00:16:00] in good shape. I need to remind everyone that interest rates have never just stayed the same.
They have always had some element of volatility from the market. That's always been the case, but what's compounding the reality that we are experiencing now? Is the fact that we had almost a decade and a half with the Federal Reserve heavily involved with their monetary policy that stabilized the whole marketplace when it came to mortgage rates.
And only when we had high inflation where the Fed had to raise their Fed fund rate, did we start to get a market for interest rates again as opposed to before? So with all of that considered, uh, we need to just. Keep paying attention to where things are and make sure that things stay within budget. So as long as we could see that, that could be helpful.
And if we're seeing the improvement in the market where it's at least a mildly seller's market, that will help the buyers. And if you are a prospective [00:17:00] seller, maybe this is a call to revisit the situation. Uh, it may be a good time before things start to move more in the other direction. It remains to be seen if that's the direction we actually go.
But stay tuned for more. I'll keep you updated on these things as they develop moving forward. Wrapping things up, what are our key takeaways here? Looking at everything? Well, first and foremost, there's price resistance even amongst the falling sales. Um, the sales prices are continuing to be strong nationally, but we know that there's a half of the country or half of the regions are lagging, and then we're seeing price.
Prices being reduced in. In those other markets. The inventory gains are helpful and they're possibly creating room to negotiate, which could be applicable even in an ultra competitive market like New Jersey. New Jersey in the Northeast. Remain price strong. But the activity has lightened up. We saw from the national numbers, investor [00:18:00] activity and cash activity has been a little bit lower.
That's been a lot of the highest level of competition in New Jersey, so that that could explain why we're seeing a little bit less activity in New Jersey, but opportunity is starting to present itself. Lastly, the mortgage rates continue to be the primary market lever here. It's going to be the thing that.
It gives people confidence to move forward or not, and as long as the headlines continue to roll through about things, whether it's right or wrong, uh, it's going to inform public opinion and it's going to inform people's decisions on whether or not now is the right time to move forward. That's our update for today.
I hope you found it helpful and useful. Looking forward to delivering more of these as they come out every month. Stay tuned later on this week for our regularly scheduled episode. If you have any questions, feel free to reach out to me. All of my contact information is in the description below. I hope you all have a wonderful day and take good care.[00:19:00] 
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