U.S. Existing Home Sales Plunge More Than Expected In March

(RTTNews) - Reflecting affordability challenges associated with high mortgage rates, the National Association of Realtors released a report on Thursday showing a steep drop by U.S. existing home sales in the month of March.

NAR said existing home sales plunged by 5.9 percent to an annual rate of 4.02 million in March after surging by 4.4 percent to a revised rate of 4.27 million in February.

Economists had expected existing home sales to tumble by 3.1 percent to an annual rate of 4.13 million from the 4.26 million originally reported for the previous month.

"Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates," said NAR Chief Economist Lawrence Yun.

He added, "Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society."

The report also said housing inventory at the end of March totaled 1.33 million units, up 8.1 percent from 1.23 million units in February and up 19.8 percent from 1.11 million units a year ago.

The unsold inventory represents 4.0 months of supply at the current sales pace, up from 3.5 months in February and 3.2 months in March 2024.

NAR also said the median existing home price for all housing types was $403,700 in March, up 2.7 percent from $392,900 in the same month last year.

"In a stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights," Yun said. "With mortgage delinquencies at near-historical lows, the housing market is on solid footing."

He added, "A small deceleration in home price gains, which was slightly below wage-growth increases in March, would be a welcome improvement for affordability."

A separate report released by the Commerce Department on Wednesday showed new home sales in the U.S. surged by much more than expected in the month of March.

The Commerce Department said new home sales spiked by 7.4 percent to an annual rate of 724,000 in March after jumping by 3.1 percent to a revised rate of 674,000 in February.

Economists had expected new home sales to climb by 0.9 percent to a rate of 682,000 from the 676,000 originally reported for the previous month.