United States existing home sales fell by 3.6% in March amid low consumer confidence, limited inventory, and rising mortgage rates.
Sales were down 1% year-over-year to 3.98 million during the month, according to the National Association of Realtors (NAR).
“March home sales remained sluggish and below last year’s pace,” said NAR chief economist Lawrence Yun.
“Lower consumer confidence and softer job growth continue to hold back buyers,” Yun said. Consumer confidence plummeted to a record low in early April, per the University of Michigan’s Surveys of Consumers.
All regions posted a drop in existing home sales last month, with the Northeast seeing the largest percentage decrease at 8.5%.
Median existing home sales prices also increased by 1.4% to a record US$408,800 in March. This was due to low inventory, according to NAR.
“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.”
The average 30-year fixed mortgage rate climbed to 6.18% during the month, up from February’s 6.05%. Mortgage rates have risen almost every week since the Iran war began in late February.
NAR’s housing affordability index dropped to 113.7, down from 117.5 in February. Affordability was up across all regions year-over-year, however.
The median time properties spent on the market was 41 days, falling from 47 days in February.
