US home sales have reached their lowest annual level since 2009, according to data released by the National Association of Realtors. The drop is largely attributed to high borrowing costs and falling consumer confidence sparked by concerns about the broader economy.
Sales of previously owned homes fell 5.9% from February to an annualized rate of 4 million units, beating expectations for a rebound in sales this year. Economists had anticipated a boost in transactions due to increased inventory, but mortgage rates and affordability challenges are holding buyers back.
Mortgage rates have risen significantly since the pandemic, posing a double threat to the market: they make monthly payments more expensive and discourage people from selling their homes at low rates. The current rate of 7.8% is attributed to the Federal Reserve’s actions in selling mortgage-backed securities, which may be part of the trade war positioning.
Lawrence Yun, NAR Chief Economist, attributes the slump to both high mortgage rates and market volatility. He notes that higher rates are likely due to the Fed’s actions and foreign countries selling mortgage-backed securities back onto the market. This development may have deterred some buyers from purchasing homes, contributing to the decline in sales.
The current state of the US housing market is marked by high borrowing costs, slowing consumer confidence, and volatility in the financial markets. As the spring buying season approaches, economists will closely monitor the situation to predict whether sales will rebound or continue to slump.
Source: https://www.politico.com/news/2025/04/24/home-sales-tariffs-economy-mortgages-00307591