Existing home sales fell to a nine-month low in March as tight inventory, rising mortgage rates and growing concerns about the job market constrained sales activity. While inventory has improved in recent months, it remains below historical norms, continuing to push home prices higher as demand outpaces supply. Meanwhile, the Iran war has reversed the downward trend in mortgage rates, which jumped from 5.98% before the conflict to 6.37% last week. These headwinds will likely dampen home sales while tight inventory continues to drive home prices higher, further worsening housing affordability.
Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 3.6% to a seasonally adjusted annual rate of 3.98 million in March, the lowest level since June 2025, according to the National Association of Realtors (NAR). On a year-over-year basis, sales were 1.0% lower than a year ago.
The existing home inventory level was 1.4 million units in March, up 3.0% from February and 2.3% from a year ago. At the current sales rate, March unsold inventory sits at a 4.1-months’ supply, up from 3.8-months in February and 4.0-months a year ago. Inventory between 4.5 to 6 months’ supply is generally considered a balanced market.
Homes stayed on the market for a median of 41 days in March, down from 47 days in the previous month and 36 days in March 2025.
The first-time buyer share was 32% in March, down from 34% in February and unchanged from a year ago.
The March all-cash sales share was 27% of transactions, down from 31% in February but up slightly from 26% a year ago. All-cash buyers are less affected by changes in interest rates.
The March median sales price of all existing homes was $408,800, up 1.4% from last year. This marks the 33rd consecutive month of year-over-year increases. The median condominium/co-op price in March was up 2.3% from a year ago at $371,500. Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2026.
All four major regions saw sales declines in March, ranging from 1.3% in the West to 8.5% in the Northeast. On a year-over-year basis, sales rose in the West (+1.3%) and South (+2.2%), while sales in the Midwest and Northeast declined (-3.2% and 12.2% respectively).
The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose from 70.8 to 72.1 in February due to improved affordability. On a year-over-year basis, pending sales were 0.8% lower than a year ago, according to the National Association of Realtors’ data. However, resurgence in mortgage rates driven by the Iran war could reverse the increase.
This article was originally published by a eyeonhousing.org . Read the Original article here. .
