housing market – This spring, housing demand is moving up and away at the same time: sales above $1 million are rising while sales at the lower end—especially homes under $250,000—have fallen. The gap echoes a “K-shaped” pattern, with households positioned to benefit from equi
This spring, the housing market is splitting into two tracks—one where homes priced above $1 million are drawing momentum, and another where buyers trying to break in at the lower end are finding fewer openings.
Data from the National Association of Realtors shows that in April, home sales at the over-$1 million price point were up 9.3% from a year ago. Sales in the $250,000 to $1 million range were slower, and homes in the $100,000 to $249,999 level dropped 1.3% over the same period.
For many first-time buyers, the problem isn’t only price—it’s also what the market has become.. Faith D., 26, has been searching for her first home in the small eastern Tennessee town where she grew up.. When she was in college, homeownership felt close to reach after she graduated.. But after prices surged during the pandemic, she says little in her area is available for under $200,000.
She went under contract on one home that looked promising, only to back out after an inspection uncovered significant HVAC and sewer problems. Now, she’s searching again, and she worries she won’t find anything suitable in her price range this year.
“I’ve always been kind of on the sidelines looking in, trying to get enough money saved up to even consider getting a mortgage,” Faith said. “Even though I’m at a point now where I could afford it, it’s just insane to imagine paying that much to live in a town that doesn’t even have a hospital.”
While affordability constrains the lower leg of the market, the upper tier is moving quickly.. Selma Hepp. chief economist at Cotality. said the pattern across sectors is that higher-income households are “able to participate.” Lawrence Yun. chief economist at the National Association of Realtors. pointed to “more movement on the upper end. ” saying it could reflect conditions in which “the stock market is essentially at record-high conditions.”
In the Milwaukee suburb of Whitefish Bay. Wis.. real estate agent Marcus Auerbach described a clear advantage for some buyers who are moving up rather than entering.. He said he has seen buyers who put $35. 000 down on a starter home five years ago walk away with $200. 000 to $250. 000 in equity by selling today.
“For them, it has played out really well,” Auerbach added.
That kind of equity runway helps explain why higher-end inventory is staying active this spring.. Auerbach said sales for the area’s higher-end homes—those at about $800. 000 and above—have been strong. and he’s seen all-cash offers on the rise.. He also noted that moderate- and entry-level-priced homes have been taking longer to sell. saying. “The Milwaukee suburbs are not exactly dirt cheap anymore.”
The split is showing up in new construction as well.. In an earnings call last month. PulteGroup CEO Ryan Marshall said the company—described as the nation’s third-largest homebuilder—has seen strong demand for move-up homes and senior living. as well as spending on high-end extras such as premium lots.
“However, on the lower leg of the K, first-time buyers continue to struggle with the challenges of stretched affordability and fear of job loss,” Marshall said.
For Faith D., that disconnect is visible in who she thinks is showing up for high-priced listings.. Higher-end listings in her community—sometimes priced above $500. 000—have been proliferating. but in an area where the median household income is under $50. 000. she says those prices are out of reach for most locals.. Her and her agent’s best guess is that the buyers are “well-heeled relocators and vacationers.”
The sequence is consistent across the market numbers and the lived experience: April sales rose 9.3% for homes over $1 million while the $100. 000 to $249. 999 segment fell 1.3%. and the people with move-up equity described faster wins—while first-time buyers like Faith D.. keep running into stretched affordability and the need to find financing or back out after expensive surprises.
The result is a spring housing market that behaves like two separate ladders.. On one, move-up buyers and higher-income households with resources tied to equity markets appear to be able to keep climbing.. On the other. first-time buyers continue to face fewer options and higher uncertainty about getting in at all—even in communities where. as Faith D.. puts it, basic local needs like a hospital remain out of reach for those priced out of the market.
K-shaped economy housing market first-time buyers home sales mortgage affordability home equity equity markets PulteGroup Whitefish Bay Tennessee