• Existing homes sales fell by 4.3% in March to a seasonally adjusted annual rate (SAAR) of 4.19M and are now down 3.7% from March 2023, according to the National Association of Realtors (NAR).
• Total housing inventory at the end of March increased to 1.11 million units from 1.07 million units in February, up 14.4% from a year ago.
• The median existing-home sales price in March was $393,500, 4.8% higher than a year ago.

What happened: After increasing in February, existing home sales fell in March. So far, more sellers than buyers returned this spring in part due to sharp increases in mortgage rates at the start of the year. Despite the slowdown, sales remain above expectations even though interest rates have moved higher than expected.

What Zillow Senior Economist Orphe Divounguy thinks: Last year, buyers returned to the housing market ahead of the spring season, but many sellers opted to stay on the sidelines. This year, more sellers are back well ahead of the spring shopping season. However, buyers – faced with a sharp increase in mortgage rates at the start of the year – have been slower to return.

Because sellers are returning to the housing market, the gap between supply and demand is closing and for-sale inventory is rising again. Unsold inventory sits at just 3.2-month supply compared to 2.7 months in March 2023. 

Although higher inventory points to the potential for more price cuts and easing price growth, well-marketed and competitively priced listings are selling fast and prices are still rising. According to Zillow data, homes that sold did so in just 13 days – faster than the pre-pandemic norm of 21 days – but the median age of all listings on Zillow is 43 days.

The lack of existing homes on the market provides an opportunity for builders to fill the gap, and many are offering incentives such as rate buy-downs to get buyers past the mortgage rate hurdle, making the math work for prospective buyers.