3 Housing Market Predictions for April

Whether you're buying or selling, these are good things to know.

Many people have been struggling to buy a home, and for good reason. Last year, mortgage rates began rising sharply. That alone is tough enough. But home prices have also been elevated. So all told, buyers have faced affordability issues galore.

Housing market conditions can shift from one month to the next. And April could be an interesting month in the context of real estate, since spring is when property listings tend to pick up.

But we can't necessarily expect a huge jump in inventory in April. Here's what the housing market is likely to look like.

1. Mortgage rates will likely remain high

At the start of 2023, mortgage rates started to drop, which led to an uptick in home sales. Case in point: Existing home sales rose 14.5% in February compared to January, according to the National Association of Realtors (NAR).

But mortgage rates are likely to remain elevated in April. They might dip slightly, but it's fair to assume that they're not about to fall below 6% anytime soon. And they might creep up toward the 7% mark.

2. Housing inventory might increase modestly

Spring is the time for homes to hit the market -- in a normal market. In the past few years, we've had anything but.

Even if real estate inventory picks up a bit in April, buyers won't have all that many choices. As of the end of February, there were only 980,000 unsold existing homes, according to the NAR. That's a mere 2.6-month supply. And for context, it typically takes a minimum 4-month supply to balance the housing market.

Of course, limited housing inventory is a great thing for sellers. The less competition there is, the easiest it becomes to command higher prices.

But home sellers should be aware that because mortgage rates are higher these days, buyer demand isn't what it was a year ago, or back in 2021. So sellers should be prepared to make some concessions, even with inventory being pretty low.

3. Home prices will remain high

In February, the median existing home sale price dropped to $363,000, per the NAR. That's a dip of 0.2% from one year prior. But it's also not a very notable decrease.

If housing inventory picks up more than expected in April, home prices could start to drop at a more moderate pace. But buyers should not expect, say, a 5% drop in home prices. A 1% drop would, at this point, be significant given the way home prices have trended over the past year.

Should you buy or sell a home in April?

Unfortunately, April is shaping up to be a pretty difficult month for home buyers. Those looking to sell a home may have more success, especially if they list early, before the competition increases.

That said, buyers should take comfort in the fact that home prices are starting to drop. If inventory jumps in April, it could set the stage for more affordable prices in May. And if mortgage rates happen to dip at that point, it could help address the affordability crunch that's been plaguing buyers for months on end.