Existing-home sales plummeted 4.3% in March compared with February, falling to a seasonally adjusted annual rate of 4.19 million, and were down 3.7% compared with March 2023, as rising mortgage rates stopped the rebound heading into the spring home buying season, according to the National Association of Realtors (NAR).
Rising home prices also impacted sales velocity: The median existing-home sales price in March increased to $393,500 – up 4.3% compared with March 2023.
It was the ninth consecutive month of year-over-year price gains and the highest price ever for the month of March, NAR says.
The inventory situation improved slightly: As of the end of the month there were about 1.11 million existing-homes available for sale in the U.S., an increase of 4.7% compared with February.
That’s about a 3.2-month supply at the current monthly sales pace.
Among the four major U.S. regions, sales slid in the Midwest, South and West, but rose in the Northeast for the first time since November 2023.
Year-over-year, sales decreased in all regions.
Existing-home sales had increased in February and January, lifting hope for a better spring home buying season.
“Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” says Lawrence Yun, chief economist for NAR, in a statement. “There are nearly six million more jobs now compared to pre-COVID highs, which suggests more aspiring home buyers exist in the market.”
“More inventory is always welcomed in the current environment,” Yun adds. “Frankly, it’s a great time to list with ongoing multiple offers on mid-priced properties and, overall, home prices continuing to rise.”
Residential properties typically remained on the market for 33 days in March, down from 38 days in February but up from 29 days in March 2023.
All-cash sales accounted for 28% of transactions in March, down from 33% in February but up from 27% one year ago.
“Existing home sales returned to disappointing numbers, but it’s not a surprise,” says Max Slyusarchuk, founder and CEO for A&D Mortgage, in a statement. “The supply of these homes is finite, ultimately, and with rates historically high for the near term, we don’t expect to see many more positive numbers in this particular housing sector anytime soon. We expect new home sales to perform much better in the coming months, by comparison.”
Photo: Breno Assis