The National Association of Realtors reported on Thursday that sales of existing homes fell in April to a 4 million annual rate. For comparison, existing home sales were running in the 6 million to 7 million range from 2020 to 2022.

On Friday, we get new home sales, which are expected to have been down in April, as well. Would-be homebuyers are facing high home prices and mortgage rates, plus plenty of economic uncertainty.

Mortgage rates are now hovering near 7%, and the median existing home price just hit $414,000, according to the National Association of Realtors.

For households that have been renting and are looking to own, “house prices far outpacing wage growth over the last five years, affordability is just severely challenged,” said Laurie Goodman, founder of the Housing Finance Policy Center at the Urban Institute.

Meanwhile, builders are hesitant to break ground with borrowing and material costs so high.

The inventory of existing homes for sale is gradually improving. It’s up 20% year over year, per Zillow economist Orphe Divounguy.

“If you have more supply coming on the market and inventory accumulating, you should get downward pressure on prices,” he said.

Zillow forecasts that home prices will fall nearly 1% over the next year — even more in top markets like New York, LA Chicago, Dallas and Washington, D.C.