March home sales mark one of the largest decreases on record for previously occupied homes in the U.S. This was the steepest drop, jointly, as reported by the National Association of Realtors (NAR). According to the National Association of Realtors, existing home sales fell to a seasonally adjusted annual rate of 4.02 million units. This loss marks a stunning 5.9% drop from February. Illustrating persistent difficulties in the housing sector, this decrease is the biggest monthly decline since November 2022.
Relative to this time last year, sales in March were down 2.4%. The U.S. housing market has been in the depths of a housing sales slump since 2022. In fact, last year their sales fell to their lowest levels in almost thirty years. As of the end of March, about 1.33 million of those homes were vacant and available for sale. This was an 8.1% jump from February, indicative of a swelling supply that isn’t driving more sales.
Despite the growing inventory of unsold homes, the national median sales price jumped to a record high for March of $403,700. That’s a historic 2.7% increase over 2022. The monthly increases are worse than they sound – home prices have risen for 21 months in a row. Buyers are still facing affordability challenges with increased mortgage rates. The average rate on a 30-year mortgage had jumped to 6.83% last week, drowning the hopes of would-be home shoppers even further.
The current housing market illustrates this concept very vividly, as there is a drastic mismatch between supply and demand. This mismatch leads to frustration on the buyer’s side and leaves sellers with few options. A typical balanced market would be around a 5- to 6-month supply of inventory. Rising inventories of unsold homes and pricey housing have made things tricky.
Lawrence Yun, NAR’s chief economist, commented on the current state of the housing market, stating, “Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society.” He expressed disappointment regarding inventory levels: “I felt that more inventory would lead to more sales, but that’s not the case.”
