The spring housing market was supposed to boom. Instead, it's whimpering.
Existing home sales in March slumped 5.9% from February — the largest month-to-month decline since November 2022 when seasonally adjusted.
Compared to a year ago, sales in March were down 2.4% from March 2024.
The decline came as something of a surprise, following an uptick in sales in February. More inventory has been hitting the market, which was expected to drive sales, and spring tends to be among the busiest times for home sales, as parents with kids try to move when school is out for the summer.
Instead, the sales figures suggest that the housing market is in a continued slump, hampered by high mortgage rates.
After inching down in the first months of the year, mortgage rates have jumped higher in the last couple weeks, as President Trump's tariff threats have roiled bond markets that help influence mortgage rates.
The average rate for a 30-year fixed-rate mortgage was 6.81% over the last week, according to data from Freddie Mac. In March and early April, rates were closer to 6.6%.
Meanwhile, home prices are also still climbing — though more slowly than before. The median existing home sales price for March was $403,700. That's up from up $392,900 from one year ago, and from $398,400 in February.
Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, expects home sales to "flatline at best." He notes that existing sales have closely tracked mortgage rates over the last few years: When rates rise, sales drop – and vice versa.
"The big picture still is one of a very subdued housing market, frozen by the gulf between the typical market rates on new mortgages — nearly 7% right now — and rates on existing mortgages —which averaged 4.3% in Q4," writes Allen.
The low home sales could also signal something larger about American society: less economic mobility. People's economic status may be "frozen," said Yun, with fewer people trading up to nicer homes.
The last two years have been incredibly slow, with existing home sales at their lowest levels since the mid-1990s.
New home sales are rosier
Elsewhere in the market, a different story is unfolding. Sales of new single-family homes were up 7.4% from February, and 6% higher than a year ago. That's according to data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development released on Wednesday.
The median sales price of new homes sold in March 2025 was $403,600 — a smidge lower than the median sales price of an existing home.
That's unusual: There's usually a 15-20% premium for new homes, said Yun. This month's price parity between new and existing homes is an indication that homebuilders are more into constructing smaller, cheaper homes — and not the high-priced McMansions of yore.
That supply is good news for buyers who've been priced out of the existing home market — though some regions, especially the Northeast, are building scant little new housing.
Nonetheless, there are signs that this year's spring market overall might be a weak one.
Mortgage applications decreased 12.7% from one week earlier, according to data from the Mortgage Bankers Association for the week ending April 18.
That's the result of mortgage rates jumping in the last two weeks, said MBA President and CEO Bob Broeksmit in a statement.
"[M]any potential borrowers will likely stay on the sidelines until they have a better idea of the direction that rates, and the economy, are headed," he said.
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