The Housing Slowdown Beneath the Headlines

• There were 1.5 million existing homes for sale in April.

• The number of days on the market keeps rising.

• The median year-over-year sales price was up less than 0.1%.

The Fed’s patience is one thing. Housing’s slowdown is another…

The opening stretch of the year has tested homebuyers’ patience. Oil is climbing, CPI is drifting further from the Fed’s 2% target, and policymakers aren’t blinking. They’re still uneasy about the pace of inflation and want last year’s rate cuts to work through the system — a process that typically takes six to eight months. From their vantage point, time is an asset, and they intend to use it.

But while markets obsess over the Fed’s next move, they’re missing a signal hiding in plain sight: housing demand has cooled. Redfin shows the average home sat on the market for 55 days in April — longer than 2025’s 49 days and the slowest turnover since the early COVID period, when the average was 50. That’s not background noise. That’s a real shift.

The National Association of Realtors (“NAR”) is telling the same story. Existing home sales held at an annualized 4.02 million in April, still scraping the bottom of a multi‑year range. Inventory, meanwhile, is back at pre‑pandemic levels. More supply paired with softer demand is putting a lid on prices. And when home prices soften, inflation follows — giving the Fed more room to ease later this year. That easing cushion is one of the quiet forces that should help support a steady S&P 500 rally as 2026 unfolds.

But don’t take my word for it, let’s look at what the data is telling us…

Each month, NAR publishes its housing indicators. Existing home sales account for 85–90% of total volume, making them the cleanest read on market health. In April, months’ supply held at 4.3, matching March and sitting near the top of the past decade’s range. And remember: supply should be tightening as we move into spring. Instead, it’s holding firm. That’s not what a hot market looks like...

Time‑on‑market data reinforces the point. NAR shows properties lingered for 52 days in April, up nearly 4% from a year earlier. Buyers aren’t sprinting; they’re pacing.

Prices are echoing the same tone. Realtor.com reports the median listing price per square foot was $227 in April, down 3% year‑over‑year. That marked the eighth straight month of annualized declines. We haven’t seen a streak like that since mid‑2023. Translation: sellers are losing leverage.

Sale prices confirm the softness. NAR shows the median price of an existing home sold in April was just under $418,000, up only 0.1% from last year. That’s far weaker than typical seasonality going back to 2018 and marks the thirteenth straight month of annualized growth at 2% or less, a stretch last seen in mid‑2023. Put simply, the housing market hasn’t looked this soft since the Fed was still hiking…

Bottom line: inventory is behaving exactly as it does in a soft market — it’s capping prices. A shaky job market and a Fed on hold are keeping would‑be buyers on the sidelines. And with most homeowners far more inclined to refinance than relocate, sales could stay sluggish for a while.

Housing carries real weight in the inflation calculus. It accounts for roughly 35% of CPI and about 17% of PCE. When home prices cool, rental pricing power tends to follow. That pulls down owners’ equivalent rent, one of the most influential components in both CPI and PCE.

Elevated supply should keep that pressure moving in the right direction. It will help tame inflation over the coming year and improving the chances of an additional rate cut. That easing cushion remains a quiet but meaningful tailwind for a steady S&P 500 rally as the year progresses.

Five Stories Moving the Market:

U.S. President Donald Trump expressed frustration with Iran and told it the “clock is ticking,” hours after drones targeted a nuclear power plant in the United Arab Emirates; Trump warned that Tehran “better get moving, FAST, or there won’t be anything left of them” – Bloomberg. (Why you should care – the U.S. rhetoric is taking an increasingly ominous tone toward Iran)

U.S. President Donald Trump said Chinese President Xi Jinping had agreed Tehran ​must reopen the Strait of Hormuz; Trump ‌said he was considering whether to lift U.S. sanctions on Chinese oil companies buying Iranian oil – Reuters. (Why you should care – Iran said it would welcome China’s input)

U.S. President Donald Trump returned from China facing major decisions on Iran, as his top aides have drafted plans for a return to military strikes if Mr. Trump decides to try to break the impasse with more bombs – NY Times. (Why you should care – intermediaries have been trying to pitch the U.S. on peace plans to end the conflict and reopen the Strait of Hormuz)

China said it agreed with the U.S. to lower levies on some products to promote bilateral trade, underscoring how ties between the world’s two largest economies are further stabilizing after the historic meeting of the leaders – Bloomberg. (Why you should care – China’s Ministry of Commerce said the levies were being cut to increase trade in areas including agriculture)

China’s economic momentum slowed broadly in April, underscoring persistent areas of weakness in the world’s second-largest economy as risks from the Iran war mount – WSJ. (Why you should care – consumer spending hit its lowest level of growth in four years while investment and industrial output also weakened)

Economic Calendar:

Earnings: PKE, XP

Markets in Canada are closed

China – Industrial Production, Retail Sales for April

Switzerland – GDP for Q1 (3 a.m.)

BoE’s Mann (Board Member) Speaks (4:30 a.m.)

U.S. – NAHB Housing Market Index for May (10 a.m.)

Treasury Auctions $89 Billion in 13-Week Bills (11:30 a.m.)

Treasury Auctions $77 Billion in 26-Week Bills (11:30 a.m.)

U.S. – Treasury Net Long-Term Transactions for March (4 p.m.)