March home sales slowed in a lethargic opening to the spring buying season

In March, sales of existing homes in the U.S. slowed down, marking a sluggish beginning to the spring homebuying season due to higher mortgage rates and escalating prices, deterring many potential buyers. According to the National Association of Realtors, existing home sales dropped by 5.9% last month to a seasonally adjusted annual rate of 4.02 million units. This decline is the most significant monthly decrease since November 2022. Compared to March of the previous year, sales were down by 2.4%. The average U.S. mortgage rate, which reached its highest level in two months last week, poses a significant obstacle for aspiring homebuyers, noted Lawrence Yun, NAR’s chief economist. Home prices continued to rise annually for the 21st consecutive month, albeit at a slower pace. The national median sales price increased by 2.7% in March from the previous year, reaching an all-time high of $403,700 for March. Despite more homes being listed on the market for the spring season, sales declined in March. There were 1.33 million unsold homes by the end of the month, an 8.1% increase from February. This translates to a 4-month supply at the current sales rate, higher than the 3.2-month supply at the end of March the previous year. Lawrence Yun noted that while more inventory was expected to boost sales, this has not been the case.