But sales are a lagging indicator reflecting offers accepted 3-6 weeks earlier. April sales mostly reflect buyers who locked in mortgage rates before the big late-March/April jumps, buyers highly motivated to buy before their interest rate locks expired, adding short-term pressure to demand.

Escalating interest rates initially fueled demand in early 2022 as buyers rushed to avoid further rises, but at a certain point, big increases, especially if coupled with peak prices, batter affordability. And all buyers – even all-cash buyers – can be affected financially and psychologically by stock market declines and economic uncertainty. 

If continuing, these factors can be expected to dampen purchase activity.

The housing market is beginning to show preliminary, but not universal reactions. Accounts of less crowded open houses and fewer offers on new listings are becoming more common. Some buyers are dropping out or becoming more selective; some sellers are moving listing dates forward. In many markets, declines in listings going into contract occurred in April. 

Due to the time involved in the home search/closing process, and the extremely heated conditions of early 2022, substantial changes in closed-sales statistics, if coming, won’t appear until later in Q2 or Q3.