WASHINGTON – The American housing market took another hit in March as home sales plummeted to their lowest level in nine months, according to new data released Monday by the National Association of Realtors.
Sales of previously-owned homes declined 3.6% last month, reaching a seasonally adjusted annual pace of 3.980 million units – the weakest performance since June 2025. The figure fell short of economists’ predictions, who had anticipated sales would slow to 4.06 million units.
The March decline represents sales that closed last month but likely originated from contracts signed during January and February when borrowing costs were decreasing. Every region of the country experienced decreased activity, with overall sales down 1.0% compared to the same period last year.
Lawrence Yun, the NAR’s Chief Economist, pointed to supply shortages as a primary factor limiting market activity. “Inventory remains a major constraint on the market,” Yun stated. “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 housing sector continues to face headwinds from an unstable job market, with employment declining in six of the past 15 months. Additionally, borrowing costs have climbed as the ongoing U.S.-Israeli conflict with Iran has driven up oil prices and Treasury yields amid inflation concerns.
Federal data released last week showed consumer prices jumped by the largest margin in nearly four years during March. Since mortgage rates follow Treasury yields, the popular 30-year fixed-rate loan averaged 6.37% last week, climbing from 5.98% before the conflict began, according to Freddie Mac data.
Rates had previously fallen after President Donald Trump directed Freddie Mac and Fannie Mae to increase their mortgage-backed securities purchases. The affordability crisis has emerged as a significant political topic before November’s midterm elections, as homeownership becomes increasingly difficult for many Americans to achieve.
The National Association of Realtors has revised its 2026 home sales growth projection downward to 4% from an earlier estimate of 14%. The organization’s affordability index dropped to 113.7 in March from February’s 117.5, though it remained above last year’s 104.2 reading.
“Mortgage rates have been rising, and that has led us to trim our home sales outlook for the year,” Yun explained. “Even with a more modest pace of sales growth, home prices continue to steadily increase due to minimal inventory growth.”
The typical existing home price climbed 1.4% year-over-year to $408,800 last month, marking the highest March figure on record. Available inventory grew 3.0% to 1.36 million units, though this remains significantly below pre-pandemic levels. Supply increased 2.3% from the previous year.
Based on March’s sales rate, clearing the current inventory would require 4.1 months, up from 4.0 months a year earlier. Properties remained on the market for a median of 41 days, compared to 36 days in March of last year.
First-time purchasers represented 32% of all sales, matching last year’s percentage. Industry experts believe a 40% share in this category is necessary for a healthy housing market. Cash purchases accounted for 27% of transactions, rising from 26% the previous year.
Distressed properties, including foreclosures, comprised 2% of all sales, down from 3% in the prior year.
