The seasonally adjusted annual rate of existing home sales fell to 4.02 million in March, a 5.9% decrease, as reported by the National Association of Realtors. Down 2.4% from the previous year, March’s sales pace was the slowest since 2009, a period when the U.S. housing market was reeling from the subprime mortgage crisis.
The decline in home sales is largely attributed to affordability pressures, stemming from sustained high mortgage rates and rising national home prices. Adding to these deterrents is significant economic uncertainty. Worries about employment stability and the expectation of increasing inflation are making prospective buyers hesitant, and this uncertainty is expected to continue to dampen demand.
March’s sluggish sales are a troubling indicator for the spring housing market, particularly as they occurred just prior to the April 2nd tariff announcement, an event that triggered financial market volatility and heightened economic uncertainty for buyers. Current data offers no indication of imminent mortgage rate relief or a significant decline in home prices that would noticeably improve affordability.
Counterbalancing these negative forces is the fact that a large segment of the population remains employed, providing ongoing support to the housing market. Moreover, the considerable equity homeowners have accumulated offers a buffer against forced sales due to unemployment, contributing to the currently low foreclosure rates compared to pre-pandemic years. The number of new consumers with foreclosures was 41,000 in Q4 2024 compared to 71,000 in Q4 2019 (New York Fed Consumer Credit Panel/Equifax).
Ultimately, the March existing home sales data underscores a significant level of uncertainty clouding the spring housing market. The confluence of affordability challenges, driven by unwavering mortgage rates and increasing prices, and the looming shadow of economic unease, particularly in light of recent tariff announcements, is clearly impacting buyer behavior. While the strength of the employed population and homeowner equity provide some foundational support, their ability to fully offset the prevailing deterrents remains a key question mark as the market navigates the critical spring season.
