Sales of new cars rose at a fast clip through mid-April, but could be slowing. Cox Automotive forecast in March that Trump tariffs would significantly weaken sales this year, but would also goose sales this spring as buyers tried to drive cars off lots before tariff prices landed.

Sure enough, dealers sold new cars at a 17.8 million SAAR and on Wednesday Cox Automotive forecast a 16.4 million SAAR for April, which was higher than the 16.0 million from April 2024 with the second half of the month showing signs of cooling.

Charlie Chesbrough, senior economist at Cox Automotive, said buyers hurried to buy cars in March and early April expecting tariffs to drive prices up later.

“However, inventory levels have declined substantially over recent weeks, likely pushing vehicle prices higher," Chesbrough said.

Cox Automotive also described similar trends in the used car market, with prices rising and supplies getting tighter by mid-April.

“Forecasting sales in this volatile market is quite challenging, and that is what we have right now, a market being steered by headlines coming from the White House,” Chesbrough said. “With economic concerns rising and consumer confidence declining, the outlook for new auto sales from here is more troubling.”

Credit unions rely heavily on car sales, home sales and mortgage refinances for new loans.

Refinances overall are better than the record lows of 2024, but fluctuated significantly as mortgage rates rose and fell.

While home purchases are down for existing homes, some of the drop has been softened by higher sales in the smaller new home market.

The U.S. Census Bureau reported Wednesday that new homes sold at a 724,000 SAAR in March, up 6.0% from a year earlier and up 7.4% from February. It followed a 3.1% gain from January to February.

“The March new home sales data shows that demand continues to be present in the market, provided affordability conditions permit a purchase. An increase in economic certainty would be a big boost to future sales conditions,” a report from The National Association of Home Builders said.

The median new home sale price in March was $403,600, down 7.5% from a year ago with sales particularly strong at prices below $300,000 and those between $300,000 and $400,000.

However, affordability swung with interest rates. The average 30-year fixed rate mortgage was 6.84% in February, 6.65% in March and exceeded February levels by mid-April.

“The notable drop in mortgage applications last week was the result of a 30 basis-point jump in mortgage rates over the last two weeks, driven by ongoing financial market volatility and economic uncertainty,” Bob Broeksmit, president/CEO of the Mortgage Bankers Association, said Thursday. “With rates now close to 7%, many potential borrowers will likely stay on the sidelines until they have a better idea of the direction that rates, and the economy, are headed.”

The MBA forecasted April 11 that second-quarter originations for purchases would rise 9.2% to $367 million from a year earlier, while refinances would nearly double to $182 million.

The NAR reported that inventory of existing homes has improved. There were 1.33 million single-family homes, townhomes, condominiums and co-ops available March 31, up 20% from a year earlier and up 8.1% from February.

However, prices continue to outpace wages. Half of homes sold for at least $403,700 in March, up 2.7% from a year earlier with prices rising in all four U.S. regions.

“In a stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights,” Yun said. “With mortgage delinquencies at near-historical lows, the housing market is on solid footing. A small deceleration in home price gains, which was slightly below wage-growth increases in March, would be a welcome improvement for affordability.”

Contact Jim DuPlessis at [email protected].