Sales of previously owned homes dropped in March to the slowest pace in nine months, while the national median home price hit a record high for the month.
NATIONAL SALES DATA
The National Association of Realtors (NAR) reported that existing home sales fell 3.6% in March from February, reaching a seasonally adjusted annual rate of 3.98 million units. This is the slowest sales pace since June of last year. Compared to March 2023, sales were down 1%. The figure came in below the 4.06 million pace that economists had anticipated.
The March sales pace of 3.98 million units is the slowest since June of the previous year.
HOME PRICE TRENDS
Despite the decline in sales, the national median home sales price rose 1.4% from a year earlier, reaching $408,800. This is the highest March price on record in NAR data going back to 1999. Home prices have now risen on an annual basis for 33 consecutive months.
However, the pace of growth is slowing in many metro areas. According to Selma Hepp, chief economist for Cotality, markets that depend heavily on traditional mortgage financing are seeing prices remain relatively flat. Hepp noted that fewer markets posted year-over-year price declines in April than in prior months.
MARKET CONTEXT AND INVENTORY
The housing market has been subdued since 2022, when mortgage rates began rising from pandemic-era lows. Sales of previously owned homes remained at 30-year lows in 2023 and have been sluggish in early 2024. Sales have hovered near a 4-million annual pace since 2023, well below the historical norm of approximately 5.2 million units.
According to Realtor.com, national inventory is higher than a year ago, though the rate of increase is decelerating. Active listings were up 7.9% year-over-year in February, but this growth has slowed for nine consecutive months. Overall listings remain 17% below 2019 levels. The NAR reported 1.29 million units available for sale at the end of February, representing a 3.8-month supply at the current sales pace.
Regional variations exist. Inventory improvements have been primarily seen in the South and West, particularly for homes priced below $500,000, while the Northeast and Midwest continue to experience significant undersupply.
SELLER ACTIVITY AND DELISTINGS
Data from Redfin shows a notable shift in seller behavior. In January, nearly 45,000 homes that had been delisted last fall were relisted for sale—the highest January figure in a decade. This followed a period last September when approximately 85,000 sellers delisted homes, an increase of 28% from the previous September.
In April, 5.8% of all home listings nationwide were pulled off the market, tying with December for the highest share of delistings since March 2020. Delistings in April were up 3.8% from March. Atlanta had the highest share at 1 in 10 listings, followed by San Jose, California (9%), and Los Angeles, Dallas, and Seattle (approximately 7.8% or 7.7%).
"More sellers are being asked for concessions, and some opt to remove their homes from the market to relist in the spring." — Ashley Rummage, Raleigh real estate agent
Patricia Ammann, a Redfin agent, stated that buyers are often offering under the asking price and completing inspections.
MORTGAGE RATE ENVIRONMENT
Homes purchased in March likely went under contract in January and February, when the average rate on a 30-year mortgage ranged from 5.98% to 6.16%. The 5.98% rate was the lowest in three and a half years.
Mortgage rates have been rising since the start of the conflict with Iran, attributed to increased energy prices and inflation concerns. These factors have pushed up yields on U.S. 10-year Treasury bonds, which lenders use as a guide for pricing home loans. The average rate on a 30-year mortgage was 6.37% last week, according to Freddie Mac.
ECONOMIC INDICATORS AND FORECASTS
Lawrence Yun, NAR's chief economist, stated that lower consumer confidence and softer job growth continue to hold back buyers. A measure of Americans' short-term expectations fell 1.7 points to 70.9, remaining below 80 for the 14th consecutive month. A reading below 80 can signal a potential recession.
Yun noted that while home sales saw a modest gain in February, actual demand remains subdued relative to wage growth and job increases. He emphasized that wage growth is outpacing home price growth by nearly four percentage points. Yun stressed that increasing supply is crucial for limiting home price growth, improving affordability, and boosting transactions.
Due to the rise in mortgage rates, Yun revised his 2026 existing home sales forecast downward. He now projects a 4% increase in sales for the year, compared to a previous forecast of a 14% increase.
Danielle Hale, chief economist at Realtor.com, noted that with mortgage rates recently near four-year lows, a key consideration is the potential impact on both buyer and seller activity.
ADDITIONAL SALES METRICS
- First-time buyers accounted for 34% of total sales in February, up from 31% a year ago.
- Investors maintained 16% of sales, unchanged from the previous year.
- The time required to sell a home increased to 47 days in February, up from 42 days a year prior.
- Sales activity in February was strongest for properties priced at $1 million or more, while sales sharply declined in the lowest price segments.
- The sales decline in March was attributed to decreases in the Northeast and Midwest regions.