The housing market has been glaringly skewed in sellers' favor since the latter part of 2020. That's because mortgage rates started plummeting at that point, leading to an immediate uptick in buyer demand. At the same time, the market has been starved for inventory, leading buyers into bidding wars that have driven home prices up across the country.

This month, we could see some notable changes in the housing market -- and no, that doesn't mean a crash, so sellers need not worry. Here's what buyers and real estate investors should expect.

The exterior view of a brick house.

Image source: Getty Images.

1. A reduction in mortgage volume

During the first week of April, mortgage applications to purchase a home dropped 3% from the week prior, according to the Mortgage Bankers Association. They were also 9% lower than they were the same week the year before. As such, it won't be surprising to see total mortgage volume for April wind up lower than it was in April of 2021.

As mortgage rates continue to climb, we should expect a modest but steady decline in mortgage demand. And that's not a bad thing, because if buyers start to pull out of the housing market, it might send sellers the message that the sky-high listing prices they've been getting away with are no longer going to fly.

2. A modest decline in home prices

For the week ending April 3, about 12% of homes up for sale had a price reduction, according to Redfin. That's up from the 9% of homes that reduced their prices the same time a year ago.

Mortgage rates have risen at a sharp enough pace this year that buyers are finally starting to reconsider whether now's a good time to purchase a home. And that could lead to lower home prices across the board in April. This isn't to say that prices will plunge, but it wouldn't be unreasonable to expect a modest drop.

3. A small uptick in home listings

Spring has long been a popular time to sell a home. Last year, there was no spring inventory boom, but to be fair, economic conditions were poor and we were still in pre-vaccine times. Sellers may have been skittish to list a home back then, but this April, we could see more movement in that regard.

In fact, during the first week of April, the number of new home listings rose 8% from a year ago, according to Realtor.com. Granted, that came on the heels of four straight weeks of annual declines, but the warmer weather alone could prompt more sellers to list in the coming weeks. Furthermore, sellers may be motivated to list sooner rather than later now that mortgage rates are on a steady rise so as to not land in a scenario where rates get so high they drive buyers away.

An interesting month

All told, the housing market could shift in an interesting way in April. Regular buyers and real estate investors alike should keep close tabs on the housing market to see how these trends hold up.