March experienced the slowest pace of US existing home sales since 2009, as rising mortgage rates and economic uncertainties keep potential buyers sidelined despite increasing inventory.
Key Takeaways
- Existing home sales fell 5.9% to an annual rate of 4.02 million units in March, marking the slowest pace since the 2009 subprime mortgage crisis
- Mortgage rates hovering near 7% and economic concerns, including inflation and tariffs, are deterring potential buyers
- Housing inventory increased 19.8% year-over-year, providing more options for buyers but extending the average time homes remain on the market
- The median home price rose 2.7% to $403,700, the smallest annual gain since August
- First-time buyers represented 32% of purchases, well below the historical average of 40%
Housing Market Hits Troubling Milestone
The U.S. housing market continued its downward trend in March, with existing home sales dropping 5.9% to a seasonally adjusted annual rate of 4.02 million units. This marks the slowest sales pace since 2009 during the subprime mortgage crisis, according to data from the National Association of Realtors (NAR). The March figures fell short of economists’ expectations, who had forecast a more modest decline to 4.13 million units. The persistent combination of elevated mortgage rates, high home prices, and growing economic uncertainty has created significant headwinds for the housing market as the traditionally active spring buying season begins.
While home sales declined, inventory rose substantially, increasing by 19.8% from the previous year to 1.33 million units. This shift has extended the time properties remain on the market to an average of 36 days, compared to 33 days a year ago. The current inventory would take approximately 4 months to exhaust at March’s sales pace, up from 3.2 months a year ago, indicating a gradual shift toward a more balanced market from the extreme seller’s market of recent years.
The US housing market was awfully quiet in March
Existing home sales:
• Year-over-Year: -2.4%
• Month-over-month: -5.9%• Slowest March pace since 2009
• Biggest MoM decline since Nov. 2022Not for a lack of listings, the YoY supply was up 20%… pic.twitter.com/yKAEdfOquJ
— Morning Brew ☕️ (@MorningBrew) April 24, 2025
Affordability Challenges Persist
The median home price in March was $403,700, representing a 2.7% increase from the previous year. While this marks the ninth consecutive month of year-over-year price gains, it’s also the smallest annual increase since August, suggesting some cooling in the market as inventory builds. The ongoing affordability crisis has particularly affected first-time buyers, who constituted 32% of purchases in March. While consistent with the previous year, this figure remains well below the historical average of 40%, highlighting the continued challenges faced by those trying to enter the housing market.
All-cash sales decreased to 26% of transactions from 28% the previous year, while distressed sales, including foreclosures, increased slightly to 3% from 2% a year ago. These figures reflect changing market dynamics as buyers adapt to current economic conditions. Contracts for March sales were likely signed when mortgage rates were hovering above 7%, placing additional pressure on affordability for many potential buyers who require financing to purchase a home.
Regional Variations and Future Outlook
The housing market showed significant regional variations in March. The West was the only region to record a year-over-year sales gain, driven primarily by strong activity in the Rocky Mountain states. Meanwhile, other regions experienced more pronounced declines as economic concerns and affordability challenges weighed more heavily on potential buyers. In contrast to the existing home market, new home sales surged to a six-month high in March, with builders offering various incentives to attract buyers amid the challenging market conditions.
Economic analysts have expressed concern about the housing market’s near-term prospects. The NAR reports an increase in canceled contracts in March, with potential for further cancellations due to stock market volatility. Additional pressures such as persistent inflation, employment concerns, and potential impacts from tariffs may further dampen buyer enthusiasm. Despite these challenges, property values have remained resilient, with NAR Chief Economist Lawrence Yun noting that household wealth in residential real estate continues to reach new heights, contrasting with recent volatility in stock and bond markets.
