May 16, 2025
Reports and articles referenced:
VIDEO TRANSCRIPT:
- I’m Danielle Hale, Chief Economist at Realtor.com®. This week I’m going to cover the latest data on small business optimism, retail sales, and inflation. I’ll review the latest mortgage rates, Realtor.com weekly housing data, and housing starts. Finally, because May is Affordable Housing month, I’ll share insights from the latest Realtor.com Rental Trends report and a report on the affordability of currently for-sale homes.
- Let’s start with small businesses whose optimism waned in April as job openings went unfilled and respondents reported concerns about what’s ahead for the economy.
- Looking at government data on retail sales, while the month to month change was lackluster, sales rose by roughly 5% overall year to year, with sales at furniture stores up while gasoline stations saw sales drop.
- Retail sales are not adjusted for inflation, which was likely a factor for gas stations. In fact, falling energy prices helped hold the overall CPI increase to 2.3% annually, its lowest in 50 months.
- Amid ongoing trade tensions, it’s worth noting that the relief in this inflation report is based on what happened in April. In the meanwhile some retailers, most notably Walmart, have announced planned price increases to navigate tariffs ahead. The expectation of higher prices ahead helps to explain why mortgage rates ticked higher and continue to be more of an inhibitor than a catalyst for home sales.
- Looking at Realtor.com weekly housing data we see that the number of homeowners choosing to sell continues to be higher than one-year ago which is pushing up the number of for-sale homes. The higher level of inventory has kept asking prices relatively flat this week and time on market has grown, a signal that sellers should think twice before overreaching on price.
- We also learned that tariff uncertainty likely held builders back in April, with permits and completions both slipping for the month. The drops were most pronounced in single-family building while multi-family starts actually moved notably higher..
- Finally, May is Affordable Housing month. The Realtor.com April Rental Trends report found that while rents still command a hefty slice of the typical paycheck, that share dropped nationwide and in just about all major markets in the last year. Rental affordability improved the most in parts of the West and South.
- In the for-sale market, we partnered with the National Association of Realtors® to study affordability and found that while inventory was encouragingly up overall, some income groups in some markets actually saw a decline in what’s affordable to them.
- Nationwide, we saw gains in the share of inventory that is affordable to mid- and upper-middle income buyers, while the biggest gap in affordability is for those earning less than $50,000 per year. The key lesson here is that we need to not only build more homes, but concentrate on lower-priced homes.
- You can find all the details, including full reports and our housing data for download, at realtor.com/research. You can also follow us on X (formerly twitter) for real time updates. And instagram for graphics.
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