U.S. Existing Home Sales Plunge 5.9% Amid Economic Uncertainty

In March, the sales of existing homes in the United States decreased by 5.9% compared to the previous month, marking the largest monthly decline since November 2022. This downturn is attributed to the heightened economic uncertainty, which has deterred potential buyers. Many Americans are concerned about job security and the potential impact of a declining stock market, leading them to postpone their plans to purchase new homes.

High interest rates continue to suppress market demand, and the imposition of tariffs has further exacerbated economic uncertainty, driving the U.S. housing market to its worst performance since the financial crisis. According to the latest report from the National Association of Realtors, the seasonally adjusted annual rate of existing home sales in March was 4.02 million units, the largest monthly decline since November 2022 and the slowest March sales pace since 2009, near the peak of the financial crisis.

High mortgage rates continue to dampen buyer activity, while the supply of homes is increasing faster than demand, leading to a rise in inventory and making buyers more selective. Additionally, the recent surge in economic uncertainty has further discouraged potential buyers. Some Americans are worried about job security or the impact of a declining stock market, leading them to delay their home purchases.

Despite the decline in demand, home prices remain high due to limited supply. In March, the median price of existing homes nationwide increased by 2.7% year-over-year to $403,700, setting a new record for the month. High interest rates are the primary cause of the market slowdown. Although the Federal Reserve has paused rate hikes for several months, the 30-year fixed mortgage rate remains around 6.9%, significantly higher than the 3% low point during the pandemic. This high-rate environment has led to a sharp decline in affordability, pricing many potential buyers out of the market.

On the other hand, the supply of homes has been increasing faster than demand since the beginning of the spring season. Lawrence Yun, chief economist of the National Association of Realtors, stated that even with the increase in inventory, existing home sales are struggling to gain momentum. He had hoped to see some meaningful recovery this year, but so far, it has not materialized.

The March data primarily reflects purchasing decisions made in February and January, before the announcement of U.S. tariffs disrupted the market. Some economists predict that the economy may be heading towards a recession. In February, home sales increased, as buyers and sellers who had been waiting for market improvement decided to take action. However, in recent weeks, economic uncertainty has intensified, causing some home sales to decline. Americans sometimes delay home purchases due to concerns about the economy, job security, or a declining stock market.