Just as the spring homebuying season was about to kick into high gear in much of the country, sales of existing single-family homes and condos took a big tumble.
Sales were down 5.9% in March from one month earlier to a seasonally adjusted 4.02 million, according to the National Association of Realtors. That’s the lowest number of sales from any March since 2009 when the country was in a deep recession, and the largest month-to-month decline since November 2022. The latest numbers followed a 4.2% increase in existing sales in February from January.
“It’s a little disappointing, because [earlier this year] we thought we saw a light at the end of the tunnel,” said Lawrence Yun, the NAR’s chief economist.
The decline in sales was even more pronounced for single-family homes, which fell 6.4% from the previous month and were down 2.2% from the same period in 2024. Condo sales were unchanged in March but dropped 5% from a year earlier.
The supply of homes on the market rose 8.1% in March to 1.3 million, an increase of nearly 20% over what was available at the same time last year. But more choices for consumers hasn’t yet translated into more sales. The problem continues to be high mortgage rates, Yun said, which have fallen only slightly after hitting 7% in January.
People who currently own homes are seeing benefits from the slow housing market, with the median sales price in March up 2.7% from a year ago to $403,700. In fact, that’s slightly higher than the median sales price last month for new homes, something Yun said was “very unusual.”
Price gains have slowed down, however; the increase in March was the lowest since last August, Yun noted. An NAR survey of realtors last month revealed at least one sign that the market is becoming more favorable to buyers. Nineteen percent of buyers waived their right to an appraisal contingency, down from 25% a year ago. The appraisal option allows a buyer to back out of a deal if a home turns out to be worth less than the agreed-upon price.
All four major U.S. regions saw sales fall in March, most notably in the West where they dropped 9.4% from a month earlier. The dip was 5.7% in the South, 5% in the Midwest and 2% in the Northeast. Median sales prices rose in each region from the same time in 2024, though the change was more significant in the Northeast at 7.7%. By contrast, prices rose just 0.6% in the South, which Yun noted has seen much more new home construction recently.
“We expect sales to remain sluggish through the rest of 2025, with elevated mortgage rates alongside a weaker economy weighing on activity,” Nancy Vanden Houten, lead U.S. economist at Oxford Economics, said in a statement.