Sales of existing homes in the United States fell 5.9% in March, the biggest monthly decline in more than two years.
The seasonally adjusted annual rate of 4.02 million existing home sales for March reported by the National Association of Realtors is “a lackluster start” to what’s usually the busiest selling season, The Wall Street Journal declared Thursday.
“The sharp drop in sales dashes early hopes that this spring would offer signs of a turnaround,” the newspaper said of the biggest month-over-month decrease in that number since November 2022.
Compared to March 2024, sales of existing single-family homes, townhomes, condominiums and co-ops were down 2.4% from 4.12 million, according to the National Association of Realtors.
Lawrence Yun, the association’s chief economist, cited the high costs of buying a home.
“Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates,” Yun said. “Residential housing mobility, currently at historic lows, signals the troublesome possibility of less economic mobility for society.”
The median existing-home price rose above $400,000, reaching an all-time high for the month of March. The 2.7% increase from $393,900 in March 2024 to $403,700 last month marked the 21st consecutive month of year-over-year prices rising, the association said.
While existing home sales were down in every region, the west saw the biggest decline, a 9.4% fall from February, but the annual rate of 770,000 sold was up 1.3% from March 2024. The median price for an existing home was also up, by 2.6% to $621,200 from a year ago.
In what Realtor.com called ”a bright spot for prospective homebuyers," housing inventory continued to increase, reaching 1.33 million units by the end of March, up 8.1% from February and 19.8% from March 2024.
Still, Realtor.com warned the latest sales numbers are “flashing a warning sign” for this spring’s housing market.
“The slowdown in sales in March is a troublesome sign for the spring housing market, particularly because it precedes President Donald Trump’s April 2 tariff announcement, which roiled financial markets and introduced economic uncertainty for homebuyers,” the website said.
Mortgage rates have fluctuated along with the markets, jumping briefly above 7% earlier this month. Thursday, the Federal Home Loan Mortgage Corporation, better known as Freddie Mac, reported the weekly U.S. average 30-year fixed-rate mortgage dropped slightly, to 6.81%.
Mortgage News Daily posted a 6.92% 30-year fixed rate mortgage rate for Thursday.
“Mortgage rates continue the slow, bumpy process of healing from the rapid rise seen 2 weeks ago,” Mortgage News Daily’s Matthew Graham said, with a week that began “on shakier footing as rates lurched higher on Monday.”