US housing market struggles for traction as costs sideline would-be buyers

Existing-home sales moved lower in March, highlighting ongoing challenges in the US housing market as elevated costs and limited affordability continue to sideline buyers.

Data from the National Association of Realtors showed that completed sales of previously owned homes declined 3.6% from February, reaching a seasonally adjusted annual rate of 3.98 million units. Compared with March last year, sales were also down 1.0%.

The slowdown extended across all major regions on a monthly basis, reflecting broad-based softness despite the seasonal transition into spring, typically the busiest period for housing activity.

“March home sales remained sluggish and below last year’s pace,” said NAR Chief Economist Dr. Lawrence Yun. “Lower consumer confidence and softer job growth continue to hold back buyers.”

Inventory levels edged higher during the month, rising 3.0% to 1.36 million units. That represents a 4.1-month supply at the current sales pace. While this marks some improvement, available housing stock remains below levels considered balanced, continuing to limit buyer choice.

“Inventory remains a major constraint on the market,” Yun said. “The inventory-to-sales ratio, or supply-to-demand ratio, is below historical norms. An additional 300,000 to 500,000 homes for sale would help bring the market closer to normal conditions and allow consumers to make purchase decisions without feeling rushed.”

Home prices, however, remained supported. The median existing-home price climbed to $408,800 in March, a 1.4% increase from a year earlier, extending the streak of annual price gains.

Breaking down the data, single-family home sales slipped 3.5% month over month, while condominium and co-op sales posted a steeper decline of 5.4%. On a year-over-year basis, condo and co-op transactions also recorded a notable drop.

Regionally, all four major US areas registered monthly declines. On an annual basis, performance was mixed, with some regions managing gains while others continued to contract.

The March figures point to a housing market still grappling with affordability constraints and elevated borrowing costs, conditions that are tempering demand even as supply shows signs of gradual improvement.