Existing-home sales declined 3.6% in March to a seasonally adjusted annual rate of 3.98 million, according to the National Association of Realtors (NAR) Existing-Home Sales Report. Sales were also down 1.0% compared to one year ago, with activity softening across all regions. At the same time, inventory rose 3.0% to 1.36 million homes, offering buyers more choices as the spring market unfolds—though demand remains somewhat restrained.
Affordability Pulls Back After Months of Improvement
Affordability took a step back in March after eight consecutive months of gains. The Housing Affordability Index dipped to 113.7 from 117.5 in February, reflecting the impact of rising mortgage rates and continued price growth. As Lawrence Yun, chief economist for the NAR, explained, "March home sales remained sluggish and below last year's pace. Lower consumer confidence and softer job growth continue to hold back buyers." While affordability is still improved compared to a year ago, the recent shift highlights how sensitive buyer activity remains to changes in rates and overall economic confidence.
Buyer Activity Shifts as Market Conditions Evolve
The composition of buyers adjusted slightly in March. First-time buyers made up 32% of purchases, down from 34% in February, while investor and second-home activity increased to 18%. Cash sales declined to 27% of transactions. Homes sold more quickly, averaging 41 days on market compared to 47 days the month prior, suggesting that well-priced homes continue to attract attention. Overall, the market reflects a mix of cautious primary buyers and opportunistic investors responding to changing conditions.
Prices Continue to Rise Amid Limited Supply
The median existing-home price climbed to $408,800 in March, up 1.4% from one year ago and marking the 33rd consecutive month of annual gains—a record high for the month. Inventory increased to a 4.1-month supply, moving closer to a balanced market but still below long-term norms. As Yun noted, "Because inventory remains limited, the median home price rose to a new record high for the month of March," adding that supply remains a key constraint, with hundreds of thousands of additional listings needed to bring the market closer to balance.
Looking Ahead
March reflects a market that continues to adjust as spring demand meets ongoing supply limitations. "Mortgage rates have been rising, and that has led us to trim our home sales outlook for the year," Yun said, noting that expectations for sales growth have been revised slightly lower. For buyers, more inventory is creating opportunity, but affordability remains a moving target. For sellers, success will depend on pricing appropriately and presenting homes well as buyers become more selective in a gradually rebalancing market.
Regional Sales Snapshot
Northeast: 430,000 existing-home sales (-8.5% MoM, -12.2% YoY) | Median Price: $494,500 (+5.7%)
Midwest: 920,000 existing-home sales (-4.2% MoM, -3.2% YoY) | Median Price: $315,500 (+4.9%)
South: 1.86 million existing-home sales (-3.1% MoM, +2.2% YoY) | Median Price: $362,600 (+0.8%)
West: 770,000 existing-home sales (-1.3% MoM, +1.3% YoY) | Median Price: $613,400 (-1.3%)
