Sales of previously owned homes fell 5.9% in March, the weakest pace for the month since 2009. According to the National Association of Realtors, sales tumbled to just 4.02 million units on a seasonally adjusted annualized basis. This drop reflects a larger pattern seen in all regions across the country. The West region again experienced the largest decline, with a shocking decrease of more than 9%.
This new trend was on full display when the median price of an existing home sold in March soared to an all-time high of $403,700. Even with this record number, the value was up only 2.7% from March 2022. The continuation of universally stubborn high prices is still making it hard for buyers hopeful to break into a clearly costly market already killed by high mortgage rates.
First-time buyers accounted for 32% of the market in March, up from 30% a year earlier. This uniformity underscores the ongoing challenge of affordability. Despite this, new entrants remain incredibly bullish on the housing market. The percentage of all-cash sales did go down, dropping from 28% last year to 26%, an indication of changing buying patterns among buyers in the market.
Lawrence Yun, Chief Economist at the National Association of Realtors, highlighted the current market dynamics, stating, “Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates.” He further noted the resilience of residential real estate, saying, “In a stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights.”
By the end of March, there were only 1.33 million homes available for sale. This figure represented almost a 20% increase from March 2024. Buyers at least have some relief to turn to, as inventory continues to rise. Still, at the pace of sales today, that is only a four-month supply of homes. A healthy market usually needs a six-month supply to effectively satisfy demand.