US Existing Home Sales Fall to Nine-Month Low
U.S. existing home sales dropped to their lowest level in nine months during March, as limited housing supply and growing labor market concerns weighed on activity. Rising mortgage rates, partly driven by geopolitical tensions, are also expected to further slow the housing market this year.
Housing Market Weakens as Sales Decline
According to the National Association of Realtors (NAR), home sales fell 3.6% in March to a seasonally adjusted annual rate of 3.98 million units, marking the weakest level since June 2025. This figure came in below economists’ expectations of 4.06 million units.
Since existing home sales are recorded at closing, the March data likely reflects contracts signed earlier in the year when mortgage rates were lower. Sales declined across all four U.S. regions and were down 1.0% compared to a year ago.
Inventory Shortage Continues to Pressure Market
Limited housing inventory remains a key challenge for the market. NAR Chief Economist Lawrence Yun noted that an additional 300,000 to 500,000 homes would be needed to bring conditions closer to normal and reduce pressure on buyers.
Labor Market and Mortgage Rates Add to Headwinds
The housing market is also facing pressure from a soft labor market, with nonfarm payrolls declining in several recent months. At the same time, higher mortgage rates continue to restrict affordability and demand.
Geopolitical Tensions Push Mortgage Rates Higher
The ongoing conflict involving the U.S., Israel, and Iran has contributed to rising oil prices and increasing U.S. Treasury yields, fueling inflation concerns. As a result, mortgage rates have climbed, with the average 30-year fixed rate rising to 6.37%, up from 5.98% before the conflict, according to Freddie Mac.
Mortgage rates tend to follow Treasury yields, meaning continued volatility in global markets could further impact borrowing costs.
Housing Affordability Becomes Key Political Issue
Although earlier policy actions helped lower mortgage rates temporarily, affordability remains a major concern. With homeownership becoming increasingly difficult for many Americans, housing is emerging as a critical issue ahead of upcoming elections.
Home Prices Continue to Rise Despite Slower Sales
Despite declining sales, home prices are still increasing due to limited supply. The median existing home price rose 1.4% year-over-year to $408,800, the highest level ever recorded for March.
The inventory of available homes increased slightly to 1.36 million units, though it remains well below pre-pandemic levels. At the current pace, it would take 4.1 months to sell all available homes, up from 4.0 months a year ago.
Market Activity Shows Mixed Signals
Homes are staying on the market longer, with the median listing time rising to 41 days, compared to 36 days a year earlier.
First-time buyers accounted for 32% of sales, unchanged from last year, though a 40% share is typically considered healthy for the market. Meanwhile, all-cash transactions increased slightly to 27%, while distressed sales, including foreclosures, declined to 2%.
