March Home Sales Drop Sharply as Mortgage Rates Stay High/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ March home sales dropped 5.9% in the U.S., marking a slow start to spring. High mortgage rates and rising home prices continue to deter buyers. Inventory rose, but buyer activity remained tepid nationwide.
Spring Housing Market Slows as Mortgage Rates Climb — Quick Looks
- Sales Slide: Existing home sales fell 5.9% in March from February.
- Year-Over-Year Dip: Sales dropped 2.4% from March 2024 levels.
- Median Price Rises: Home prices hit $403,700 — a March record.
- Rates Climb Again: 30-year mortgage average at 6.83%, highest in 8 weeks.
- More Listings: Inventory up 8.1%, but buyers still hold back.
- Expert Insight: NAR warns of “historical lows” in housing mobility.
March Home Sales Decline as High Mortgage Rates Stall Spring Buying Season
Deep Looks
WASHINGTON (April 24, 2025) — The typically bustling spring homebuying season is off to a sluggish start as U.S. home sales slid 5.9% in March, according to new data released Thursday by the National Association of Realtors (NAR).
Sales of previously owned homes fell to a seasonally adjusted annual rate of 4.02 million, marking the largest monthly decline since November 2022. Year-over-year, sales were down 2.4%, missing analysts’ expectations of a 4.12 million pace, based on FactSet estimates.
Rising Rates, Soaring Prices
Analysts point to elevated mortgage rates and persistently high home prices as the main culprits discouraging prospective buyers.
“Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society,” said Lawrence Yun, NAR’s chief economist.
After a slight dip earlier in the year, mortgage rates are rising again. The average rate on a 30-year mortgage hit 6.83% last week, its highest level in two months, according to Freddie Mac.
That surge in borrowing costs has sidelined many would-be buyers, especially first-timers already contending with rising prices.
Home Prices Still Climbing
Despite slower sales, home prices have continued to rise. The national median sales price increased 2.7% year-over-year to $403,700, a record for the month of March — although it marked the smallest annual gain since August.
This was the 21st consecutive month of annual home price increases, reflecting how tight inventory and buyer competition continue to drive up values.
Inventory Ticks Up, Buyers Still Cautious
There were signs of life on the supply side, with inventory rising to 1.33 million homes, up 8.1% from February. That translates to a 4-month supply, higher than last year’s 3.2 months but still below the 5–6 month benchmark that reflects a balanced market.
“I felt that more inventory would lead to more sales, but that’s not the case,” Yun added, suggesting that buyer hesitation is outweighing new listings.
A Market in Transition
The U.S. housing market has been in a prolonged sales slump since 2022, when the Federal Reserve began raising interest rates to combat inflation. As mortgage rates rose from their pandemic-era lows, demand cooled sharply, and 2024 saw the fewest existing home sales in nearly three decades.
This year, economists had hoped that falling inflation and improved supply would help stabilize the market. But so far, high financing costs and economic uncertainty, including global trade tensions and tariff-related inflation, have kept many would-be buyers on the sidelines.
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