Market Overview
Existing home sales in the U.S. fell 5.9% in March to a seasonally adjusted annual rate of 4.02 million units, marking the largest monthly decline since November 2022. Sales also decreased by 2.4% compared to March the previous year.
The decline is attributed to elevated mortgage rates and rising home prices, with the average rate on a 30-year mortgage climbing to 6.83%, its highest in eight weeks. The national median sales price rose to an all-time high of $403,700, despite a slower annual increase.
Economic Implications
The sluggish sales and high mortgage rates are seen as barriers for potential homebuyers, with NAR's chief economist, Lawrence Yun, highlighting concerns over reduced residential housing mobility and economic mobility.
Despite the slowdown in existing home sales, new home sales surged by 7.4% from February and 6% from March last year, indicating a shift in market dynamics. Builders are offering more sales incentives and focusing on smaller, less expensive homes.