Home Sales Fell in March as Weak Job Growth Dampened Buyer Confidence

Sales of existing homes dipped in March due to weak employment growth combined with faltering buyer confidence set against the backdrop of rising mortgage rates.

Existing-home sales decreased 3.6% last month from February to a seasonally adjusted annual rate of 3.98 million, the National Association of Realtors® reported on Monday. The March readout was also down 1% from a year ago.

The decline was more pronounced among condos, which dropped 7.9% from the prior year. In contrast, single-family home sales were just 0.3% shy of their March 2025 pace.

Month-over-month sales of previously owned homes fell in all four regions, while year-over-year sales rose in the South and West and decreased in the Northeast and Midwest.

"March home sales remained sluggish and below last year's pace," says NAR Chief Economist Lawrence Yun. "Lower consumer confidence and softer job growth continue to hold back buyers."

At the regional level, inventory-constrained Northeast saw the biggest pullback in home sales, plunging 8.5% from February to an annual rate of 430,000, down 12.2% year over year, the lowest level since 1999.

At the same time, the median price in the Northeast jumped 5.7% from last year to $494,500.

"So we have a strange dynamic where we do have a home sales slump, but not a home price slump," Yun said on a call with reporters on Monday.

Meanwhile, the West experienced the most modest month-over-month decrease in sales of just 1.3% to an annual rate of 770,000, up 1.3% compared to March 2025. The median fell 1.3% year over year, settling at $613,400.

"Inventory remains a major constraint on the market," says Yun. "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."

Despite the slowdown in sales, home prices continued to rise, with the median existing-home sales price rising 1.4% from a year ago to a new record high of $408,800 for the month of March.

"That price growth has helped the typical homeowner accumulate $128,100 in housing wealth over the past six years," says Yun.

According to the economist, this bifurcated dynamic in the housing market, marked by sliding home sales and growing prices, could be a reflection of a "K-shaped" economy.

"People who are homeowners, they may say the current economy is fine or good, while the renters who are not homeowners, they feel frustrated they cannot buy a home," says Yun. "The attainment of the American dream, to the degree that they consider ownership as part of their American dream, appears to be getting further out of reach."

Meanwhile, NAR dramatically revised its 2026 housing forecast. Because of the upward trajectory of mortgage rates, Yun says he now expects existing-home sales to increase 4% this year, down from a previous projection of 14%.

Yun explained that the drastic change was due to a revised mortgage rate forecast, increasing from 6% to 6.5%, combined with a "disappointing" first quarter of sales.

New-home sales are now expected to remain flat, a downward revision from the prior forecast of a 5% gain. The median home price forecast remains unchanged, with prices still projected to rise 4% in 2026.

Inventory and affordability edged up

The supply of existing homes for sale at the end of March was 1.36 million units, up 3% from February and 2.3% from March 2025.

That equaled a 4.1-month supply of unsold inventory, up from 3.8 months in February and 4.0 months one year ago.

Affordability improved across all regions year over year, with the West ahead of the pack (+12.7%), followed by the South (+10%), with the Midwest and Northeast trailing behind at +5.3% and +4.1%, respectively.

Realtor.com® Chief Economist Danielle Hale says even though mortgage rates reversed course in March as conflict in Iran unfolded, she had expected a stronger March reading, thinking many homebuyers would likely have locked in a mortgage rate before the rate reset.

"Because March sales are largely based on activity that predated recent mortgage rate headwinds, this figure could serve as a sales ceiling until conflict in the Middle East ebbs and financial markets reflect this, which means it could be yet another tough spring for the housing market," warns Hale.

With wide variation in housing market trends and negotiating leverage across markets in 2026, Realtor.com has introduced a new tool to help buyers understand their local market in a simple summary statistic called the Market Clock.

This tool shows that even as the national housing market is in a balanced range, some metro areas still favor sellers while others have shifted further into buyer-friendly territory.