The Federal Reserve has a new chair, but mortgage rates moved in the wrong direction this week. Even so, a review of the spring housing market reveals genuine green shoots—and a clear lesson for sellers about what actually moves homes.
Kevin Warsh was sworn in as Federal Reserve chair this week. As Realtor.com® senior economist Jake Krimmel notes, the economic landscape has shifted considerably since his nomination. Middle East–driven inflation has all but removed near-term rate cuts from the table, potentially creating tension with the White House.
That tension may prove constructive: It gives Warsh an early opportunity to demonstrate the Fed’s independence, which is ultimately one of the best paths to lower mortgage rates over time.
Mortgage rates surge, but are still lower than last year
Rates jumped 15 basis points this week to 6.51%, reflecting elevated April inflation data and the lack of progress toward a Middle East resolution.
Even so, mortgage rates remain 35 basis points below this time last year—lower than any other mid-May since 2022. Not where buyers hoped, but not at recent highs either.
We know that the Realtor.com Market Clock shows that the housing market has been balanced, yet home sales remain relatively low.
We took a step back to examine the spring housing market as a whole and definitely found some green shoots in the form of improving new listings and contract signings.
These trends are widespread, but not uniform. One key factor that was common among markets picking up? Pricing realism from sellers. In markets where asking prices are starting lower, we’re seeing fewer additional price cuts and more contract signings.
Pending sales rise as down payments fall
The National Association of Realtors® April Pending Home Sales Index rose 1.4% in the month and was 3.2% above year-ago levels.
Gains were strongest in the South, followed by the West and Midwest. The Northeast lagged—though notably, Boston still topped the Realtor.com list of markets with the biggest pickup in newly pending listings.
Down payments fell this spring, reversing a long-running upward trend, Realtor.com senior economist Hannah Jones has found.
Softer home prices and a rise in government-backed VA, FHA, and USDA loans—which carry lower down payment requirements—are behind the shift. That said, down payments remain well above pre-pandemic levels, and only 15% to 20% of renters currently have enough assets to cover a typical one.
A joint Realtor.com and NAR report found that the national housing market offers buyers just 75% of the access they’d have in a well-aligned market—nearly 10 percentage points below pre-pandemic norms.
The most balanced markets are in the Midwest and Upper South, while coastal markets face the most acute shortages. The need for new construction is most pressing for entry-level and middle-income buyers.
New construction is mixed for buyers, better for renters
Realtor.com senior economist Joel Berner commented on new-home construction trends in April, finding a mixed pattern in the past year with permits little changed, starts up 4.6%, and completions down 2.0% compared to April 2025.
This surge is good news for renters, and it builds on top of the multifamily construction resilience noted by Realtor.com economist Jiayi Xu in the first quarter. However, it is not an indication that relief is on the horizon for homebuyers.
Luxury spotlight: Providence vs. Salt Lake City
Realtor.com senior economist Anthony Smith‘s luxury comparison this week pitted two regionally significant markets against each other: Providence, RI vs. Salt Lake City, UT.
Providence is a small, established Northeastern luxury market with older housing stock and a high share of million-dollar listings.
Salt Lake City is a larger Mountain West metro with entry-luxury pricing near the national norm and a market shaped by new construction—nearly half its luxury listings were built since 2000.
The contrast illustrates just how differently “luxury” can look from one region to the next.
