U.S. existing home sales fell 5.9% month-on-month in March, the largest monthly month-on-month drop since November 2022. Heightened economic uncertainty in recent weeks may scare off more buyers, with some Americans worried that their jobs may be at risk or that the stock market has fallen and delaying the purchase of new homes.

High interest rates continue to stifle market demand, and tariffs have led to increased economic uncertainty, and U.S. home sales in March collapsed to the worst level since the financial crisis.

According to the latest report from the National Association of Realtors NAR, U.S. existing home sales fell 5.9% month-on-month in March to a seasonally adjusted 4.02 million units, the largest monthly month-on-month drop since November 2022, and the slowest sales pace in March since 2009, when it was close to the peak of the financial crisis.

High mortgage rates continue to suppress buyer activity, while supply is growing faster than demand, and the rising inventory of homes for sale is also making homebuyers picky.

More critically, economic uncertainty has intensified in recent weeks, which could scare off more buyers, with some Americans putting off buying new homes because they fear their jobs may be at risk or because of a falling stock market.

Despite suppressed demand, home prices remain high due to a shortage of supply. The median price of existing homes in the United States rose 2.7% year-on-year to $403,700 in March, a record high for the same period in history.

High interest rates are the "culprit", and tariffs may scare off more buyers

The continued high mortgage rates are the main reason for the market's sluggishness. Although the Federal Reserve has paused its rate hikes for several months, the 30-year fixed mortgage rate is still hovering around 6.9%, far higher than the 3% low during the epidemic. This high-interest rate environment has directly led to a sharp decline in home affordability, and many potential homebuyers have found themselves priced out of the market.

On the other hand, the supply of homes in the United States has grown faster than demand so far this spring, and the inventory of homes for sale is rising. Lawrence Yun, chief economist of NAR, said:

Even with the increase in inventory, existing home sales are still struggling to gain momentum. I had hoped to see some meaningful recovery this year, but so far, there has been no recovery.

The March data mainly reflects purchase decisions made in February and January, before the U.S. tariff announcement disrupted the market and led some economists to predict a recession. Home sales rose in February after some buyers and sellers who had been waiting for the market to improve decided to take action.

But in recent weeks, economic uncertainty has increased, spooking more buyers and even causing some home sales to decline. Americans sometimes postpone buying new homes because of concerns about the economy, concerns that their jobs may be at risk, or concerns about a falling stock market.

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