Existing US home sales sink to a 9-month low as spring buyers stay sidelined

U.S. home sales fell to their slowest pace in nine months during March, as the housing market continues to struggle despite relatively favorable mortgage conditions. Existing home sales declined 3.6% from February to a seasonally adjusted annual rate of 3.98 million units, according to data released Monday by the National Association of Realtors (NAR).

The March figures fell short of economists’ expectations of approximately 4.06 million units and represented a 1% decrease compared to March 2023. The Northeast and Midwest regions experienced the most significant declines.

“Lower consumer confidence and softer job growth continue to hold back buyers,” explained Lawrence Yun, NAR’s chief economist. Consumer sentiment indicators support this assessment, with Americans’ short-term economic expectations falling 1.7 points to 70.9 last month—marking the 14th consecutive month this reading has remained below 80, a threshold that often signals recession risk.

The housing market has now maintained a pace of approximately 4 million annual sales since 2023, substantially below the historical norm of 5.2 million units. This prolonged slump dates back to 2022, when mortgage rates began climbing from pandemic-era lows, and sales have remained at 30-year lows throughout much of this period.

Despite sluggish sales, home prices continued their upward trajectory. The national median sales price increased 1.4% year-over-year to $408,800 in March, setting an all-time high for that month in records dating back to 1999. This marks the 33rd consecutive month of annual price increases.

The pace of home price growth has moderated in many metropolitan areas, and inventory levels are improving compared to last year, primarily because properties are taking longer to sell. However, supply remains well below historical norms, creating a persistent challenge for buyers.

Mortgage rates had been easing earlier this year, with the average 30-year fixed rate reaching as low as 5.98% in January—its lowest level in three and a half years. Homes purchased in March likely went under contract during this period of relatively favorable rates between 5.98% and 6.16%.

However, mortgage rates began ticking higher in March as Middle East tensions pushed energy prices upward, raising inflation concerns. This drove up U.S. 10-year Treasury yields, which serve as benchmarks for home loan pricing. By last week, the average 30-year mortgage rate had climbed to 6.37%, according to Freddie Mac—still lower than a year ago but trending in a concerning direction.

In response to these developments, Yun has substantially revised his forecast for 2026 existing home sales, now projecting just a 4% increase compared to his previous estimate of 14% growth. This adjustment reflects growing uncertainty about the spring homebuying season, traditionally the market’s busiest period.

The combination of elevated home prices—particularly steep increases in the early 2020s—and chronic inventory shortages continues to create significant affordability challenges, especially for first-time buyers who lack equity from existing properties. NAR reported fewer first-time buyers in March compared to February.

Those who can afford to purchase homes are finding slightly more options, with unsold inventory reaching 1.36 million properties at the end of March—up 3% from February and 2.3% year-over-year. Yet this remains far below the approximately 2 million homes typically available before the COVID-19 pandemic.

The current supply represents a 4.1-month inventory at the present sales pace, still below the 5-to-6-month supply traditionally considered indicative of a balanced market between buyers and sellers.

Regional disparities are becoming increasingly apparent. The Northeast, facing particularly severe inventory constraints, is experiencing the most competitive buying conditions, with some properties receiving multiple offers—a scenario less common in other parts of the country. This heightened competition helped drive the Northeast’s median home sales price nearly 6% higher year-over-year, even as the region recorded its slowest sales pace on record.

“We simply don’t have enough supply in the marketplace,” Yun concluded, highlighting the fundamental imbalance that continues to characterize the U.S. housing market despite changing economic conditions.