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Existing home sales in the United States declined to a nine-month low in March, falling 3.6% to an annualised rate of 3.98 million units, according to industry data. The slowdown reflects persistent supply shortages, elevated mortgage rates, and concerns around labour market conditions. Despite a modest rise in housing inventory to 1.36 million units, levels remain below historical norms. Median home prices increased to USD 408,800, marking a year-on-year rise, while affordability weakened. Market conditions have also been influenced by geopolitical tensions, which have pushed up borrowing costs. The data indicates a cautious outlook for residential transactions, with growth projections for the year revised downwards.
Existing home sales in the United States declined in the past month to their lowest level in nine months, as limited housing supply, rising borrowing costs, and labour market concerns weighed on residential transactions across the country. Data released by the National Association of Realtors showed that sales fell 3.6% to a seasonally adjusted annual rate of 3.98 million units, below market expectations and marking the weakest level since mid-2025. Advertisement
The decline reflects contracts that were likely signed in the early part of the year, when mortgage rates had briefly softened before rising again. Sales activity weakened across all four major regions in the United States, with overall transactions registering a 1.0% decline compared to the same period a year ago.
Supply conditions continue to constrain the housing market. Total inventory increased to 1.36 million units, reflecting a modest annual rise of 2.3%, though still significantly below pre-pandemic levels. At the current pace of sales, this represents approximately 4.1 months of supply, marginally higher than the previous year but indicative of a market that remains undersupplied. Industry estimates suggest that an additional 300,000 to 500,000 homes would be required to restore more balanced conditions.
Pricing trends have remained firm despite weaker transaction volumes. The median existing home price rose 1.4% year-on-year to USD 408,800, the highest recorded for the month of March. Limited inventory growth has continued to support prices, even as affordability pressures intensify for prospective buyers.
Mortgage rates have increased in recent weeks, tracking movements in US Treasury yields. Data from Freddie Mac indicated that the average rate on a 30-year fixed mortgage rose to 6.37%, up from 5.98% prior to the escalation of geopolitical tensions involving the United States and Iran. Higher oil prices and inflation concerns have contributed to upward pressure on yields, translating into increased borrowing costs for homebuyers.
The housing market has also been affected by softer labour market conditions, with nonfarm payrolls declining in several recent months. Combined with elevated financing costs, these factors have moderated buyer demand and reduced transaction volumes.
Affordability indicators have weakened, with the housing affordability index declining compared to the previous month, although remaining above year-ago levels. First-time buyers accounted for 32% of total sales, below levels typically associated with a stronger housing market. Cash transactions increased marginally, while distressed sales, including foreclosures, continued to represent a small share of overall activity.
The National Association of Realtors has revised its outlook for the year, lowering its forecast for home sales growth to 4% from an earlier estimate of 14%, reflecting the impact of rising mortgage rates and constrained supply conditions on the housing sector.
Source - Reuters
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