Existing home sales fell 1.9% in March to a seasonally adjusted annual rate of 4.07 million units, according to the National Association of Realtors. Sales are now down 3.7% from a year ago and are running at roughly the same pace as 1995, when the U.S. had 80 million fewer people. The combination of elevated mortgage rates, near-record prices, and lock-in effects on existing homeowners continues to suppress turnover.
The median existing-home price rose to $402,400, a 4.8% increase from a year earlier and the 21st straight month of year-over-year gains. Inventory expanded to 1.39 million units — a 4.1-month supply at the current sales pace, the highest since the summer of 2019. A balanced market is generally considered to be a 5- to 6-month supply.
Regionally, sales fell in the Northeast (-3.2%), Midwest (-1.0%), and South (-2.5%), while the West was unchanged. Year-over-year, the South — which had been the strongest region throughout the pandemic — is now down 5.1%, reflecting both elevated inventory in Florida and Texas and a broad cooling in markets that saw the largest pandemic-era price gains.
First-time buyers accounted for 32% of sales, up from 28% a year ago and the highest share since early 2021. The median age of first-time buyers fell to 35 from 36, suggesting that the modest improvement in inventory and the slow normalization in home price appreciation is bringing some delayed buyers back into the market — even with mortgage rates near 7%.
Cash sales accounted for 28% of transactions, down from 32% a year ago. Investor purchases were 16% of sales, in line with the long-term average. Distressed sales — foreclosures and short sales — were just 2% of transactions, an indication that despite the cyclical slowdown, mortgage delinquency rates remain very low.
The 30-year fixed mortgage rate ended the week at 6.91%, down from a recent peak of 7.18% in early April but still well above the 3.0% rate that prevailed for most of 2020 and 2021. About 60% of all outstanding mortgages have a rate below 4.0%, creating powerful financial incentives for current owners to stay in their homes — the so-called 'lock-in effect' that is suppressing existing-home inventory.
For the labor market, the housing slowdown has clear sectoral effects. Real estate brokerage employment is down 6% from its 2022 peak. Mortgage banker employment is down 35%. Construction employment, however, has held up well, supported by strong demand for new single-family homes — the one bright spot in housing as buyers turned to builders that could offer rate buy-downs and customization.
If the Fed cuts rates two or three times over the next year, mortgage rates would likely settle in the 6.0% to 6.5% range — enough to thaw the market modestly but not enough to trigger a refinancing boom or a major pickup in turnover. For aspiring homeowners, the most likely path to affordability is wage growth and inventory normalization, not a return to the rates of 2020–2021.