Your paycheck may be growing, but “inflation contagion” is eating up those gains—and then some.
Despite some frustrating macro headlines, there are real silver linings in the housing market worth paying attention to.
Mortgage rates are holding steady, sellers are recalibrating their expectations, rents keep softening, and new research puts a hard number on what buyers can save in operating costs by choosing a new-construction home.
Inflation is running hot—but markets saw it coming
The latest economic data confirmed what many economists anticipated: Inflation is running hot in the wake of Middle East tensions, and the pressure isn’t confined to energy prices.
Realtor.com® senior economist Jake Krimmel described the phenomenon as “inflation contagion”—a ripple effect that has spread across categories and more than wiped out nominal wage gains, pushing real earnings down both month over month and year over year.
The silver lining here is that this outcome was widely expected, which is partly why mortgage rates barely flinched in response. Rates actually dipped 1 basis point lower this week. (It’s worth noting that the weekly rate sample skewed toward pre-CPI days, so the full market reaction may still be unfolding.)
Looking ahead, the trajectory of rates will continue to track geopolitical developments. Any escalation in the Middle East could push rates higher, while progress toward a broader resolution could bring them down further.
Existing-home sales hold steady
The National Association of Realtors® April existing-home sales estimate showed the market holding its ground.
Sales edged up 0.2% for the month, matching last year’s pace of 4.02 million—and that gain came on top of an upward revision to March’s figures.
Median home prices continued to rise, climbing just under 1% from a year ago to $417,700. Price growth was strongest in the Northeast and Midwest, with a mild decline in the South.
These regional patterns align closely with the Realtor.com analysis of the supply gap: Housing supply remains an acute constraint in the Northeast and Midwest, while the South and West have more breathing room.
Sellers are getting more realistic
The Realtor.com weekly housing data showed little change in broader trends, but one signal stood out: Listing prices continue to soften.
Realtor.com senior economic research analyst Hannah Jones highlighted this as evidence that sellers are adjusting their expectations upfront rather than testing the market high and reducing later.
That shift is creating a more buyer-friendly environment heading into spring.
Rent relief continues
For those not yet ready to buy, the rental market is offering continued relief.
The Realtor.com April Rent Report marks 33 consecutive months of year-over-year rent declines, adding up to roughly 5% in cumulative national relief. The softening is widespread across unit sizes and geographies.
Realtor.com economist Jiayi Xu found encouraging signs that the trend could continue: While completions and units under construction are easing off COVID-19 pandemic-era highs, multifamily housing starts picked up in the first quarter, showing resilience in the construction pipeline.
At the current pace, the rental housing stock is expected to grow by just under 1% nationally over the next year, with the strongest supply growth in the Northeast.
Luxury market cools, but pockets of growth emerge
The Realtor.com April Luxury Report found that high-end home prices continue to soften. Prices in the top 10% of the market fell 1.9% from April 2025, and $1 million listings now comprise 13.5% of all listings, down from 14.1% the prior year.
That said, the story isn’t uniform. Realtor.com senior economist Anthony Smith identified emerging luxury markets—smaller areas where the number of million-dollar listings is actively growing—suggesting the high-end tier is scaling in new places even as it cools in established ones.
New construction can save you $25K in operating costs
One of the more striking findings this week comes from a new Total Cost of Ownership report by Realtor.com senior economist Joel Berner: On average, buying a new home rather than an existing one saves roughly $25,000 in energy and replacement costs over the first 10 years of ownership.
The savings vary significantly by state. New England sees the biggest operating cost advantages from new construction, driven largely by the region’s heavy energy usage. Southern states see more modest savings.
The trade-off, however, runs in the opposite direction: New construction carries a higher price premium in the Northeast and a smaller one—sometimes even a discount—in the South. So new-home buyers in the Northeast generally pay more upfront but recoup more over time, while Southern buyers see smaller premiums alongside smaller long-term savings.
In 16 of the top 300 metropolitan areas, the 10-year operating cost savings from buying new construction fully cover the upfront pricing gap between new and existing homes—making the total-cost math particularly compelling in those markets.
For anyone currently shopping for a home, it’s worth factoring total cost of ownership into the calculus, not just the listing price.
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