Timothy Gill, Vice President of Research and Chief Economist at the American Financial Services Association (AFSA), said in a newsletter that while new home sales have shown modest gains, existing home sales continue to struggle due to affordability challenges.
“Although new home sales have been trending modestly higher in recent months, existing home sales are struggling to gain traction,” said Gill, Vice President, Research & Chief Economist. “It is the case that inventories are slowly growing and price increases are slowing. Absent an economic contraction, which would likely cripple housing demand, there appears to be little downside potential for interest rates in the near future.”
In April 2025, U.S. existing-home sales fell by 0.5% from the previous month to a seasonally adjusted annual rate of 4.00 million units, according to the National Association of Realtors (NAR). This marks the slowest April sales pace since 2009. Year-over-year, sales declined by 2.0%, while housing inventory rose by 9.0% from March to 1.45 million units. These figures reflect the sustained pressure of affordability challenges and elevated mortgage rates on the housing market.
The average 30-year fixed mortgage rate dropped slightly to 6.85% for the week ending June 5, 2025, from 6.89% the previous week, as reported by Freddie Mac. Despite this minor weekly dip, mortgage rates remain at historically high levels and continue to act as a major constraint on homebuyer demand. According to Freddie Mac, these elevated rates reflect broader economic uncertainty and ongoing inflationary pressures.
According to the Federal Reserve Bank of St. Louis, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index recorded a 0.3% decline month-over-month in March 2025 but was still up 3.4% year-over-year. This data suggests a cooling trend in home prices that may offer marginal relief to buyers facing affordability issues. However, with mortgage rates still high, the slower appreciation has not yet significantly improved overall market access.
Gill is Vice President of Research and Chief Economist at AFSA with over 25 years of experience in economic analysis across major trade associations. He holds a Certified Business Economist credential and advanced degrees in economics from Miami University and John Carroll University.