A “for sale” sign is in a house in Miami, Florida, American on April 16, 2025.
Marco Bello | Reuters
Higher mortgage rates and concerns about the economy in general made a low start for the very important spring housing market.
Sales of houses previously owned in March fell 5.9% from February to 4.02 million units on a seasonal adjusted annualized basis, according to the National Association of Realtors. It is the slowest rate of sale since 2009.
Sales were less than 2.4% in March 2024 and fell in all regions from one month to the next. They fell harder in the West, the most expensive region in the country, down more than 9%. The West, however, was the only region to see a gain from one year to the next, due to a strong activity in the rocky states, where employment growth is strong.
This count is based on closures, so contracts probably signed in January and February, when the average rate of the 30 -year -old people’s fixed mortgage was greater than 7%. He did not drop securely below 7% before February 20, according to Mortgage News Daily.
“The purchase and sale of houses remained slow in March due to the challenges of affordability associated with high mortgage rates,” said Lawrence Yun, NAR chief economist. “The mobility of residential housing, currently in historic stockings, points out the embarrassing possibility of less economic mobility for society.”
Sales have dropped despite a sharp increase in the available lists. At the end of March, there were 1.33 million units for sale, an increase of almost 20% compared to March 2024. At the current sale rate, which is equivalent to an offer of 4 months, which is still on the lean side. A 6 -month supply is considered a balanced market between the buyer and the seller.
More inventory and slower sales are starting to cool on prices. The median price of an existing house sold in March was $ 403,700. It is always a summit of all time for the month, but it has only 2.7% compared to last March. This annual comparison has decreased since December and has been the smallest gain since August.
“In contrast striking with the equity and bond markets, the wealth of households in residential real estate continues to reach new heights,” said Yun. “With an assessment of real estate assets at 52 billions of dollars, according to the funds of the Federal Reserve, each gain in percentage of the prices of the houses adds more than $ 500 billion to the household balance sheet.”
The first buyers represented 32% of the market in March, as in March 2024. Historically, they represent around 40%.
Sales of all cases fell to 26% compared to 28% the previous year, but investors stabilized at 15% of sales.
For the future, the NAR already reports an increase in contracts canceled in March and, taking into account market volatility in April, this could increase.
“Mars numbers are bad, but they are likely to worsen,” said Robert Frick, business economist at Navy Federal Credit Union. “In addition to the existing pressures of high prices and high mortgage rates, the prices of house furnishings will probably soon increase due to prices, and the increase in anxiety among consumers on inflation and jobs could enlarge the instinct to withdraw already being felt by many families.”