U.S. Existing Home Sales Slide to Nine-Month Low as Tight Supply and Rising Costs Slow the Market

13 April 2026

U.S. existing home sales fell to their lowest level in nine months in March as tight housing supply, higher borrowing costs, and growing economic uncertainty combined to slow the housing market during what is normally the busy spring buying season. According to data from the National Association of Realtors, sales dropped 3.6 percent from February to a seasonally adjusted annual rate of 3.98 million units, marking the slowest pace since June last year and coming in below economists’ expectations of around 4.06 million units.

The decline suggests that the momentum seen earlier in the year, when mortgage rates briefly eased, was not enough to revive demand. The sales figures reflect deals that were likely signed in January and February, a period when borrowing costs had temporarily improved. However, higher mortgage rates and weakening confidence have since weighed on buyer activity, with sales falling across all major regions of the country and declining compared with the same period a year earlier.

Affordability continues to be a major obstacle for buyers. Although inventory increased slightly in March, the number of available homes remains far below pre-pandemic levels, leaving many buyers with limited options and driving prices higher. The median existing home price rose 1.4 percent year over year to $408,800, the highest price ever recorded for the month of March, highlighting the persistent imbalance between supply and demand.

Mortgage rates have also become a renewed concern. Geopolitical tensions, particularly the conflict involving Iran, have pushed up oil prices and U.S. Treasury yields, which in turn have lifted mortgage rates. The average 30-year fixed mortgage rate climbed to around 6.37 percent in recent weeks, making monthly payments more expensive and pricing some buyers out of the market. These higher costs are expected to weigh on housing activity through the remainder of the year.

Economic uncertainty is adding further pressure. The labor market has shown signs of weakening, with job growth slowing in recent months, raising concerns about household finances and consumer confidence. These factors have made some potential buyers more cautious, delaying decisions or stepping back from the market altogether.

The supply side of the market remains constrained. While the number of homes for sale rose modestly from February, it remains significantly below historical norms. Economists estimate that several hundred thousand additional homes would be needed to restore balance and reduce competitive pressure on prices. Builders have also been cautious, with elevated construction costs and economic uncertainty limiting the pace of new housing development.

First-time buyers accounted for about 32 percent of purchases in March, a figure that remains below the level typically associated with a healthy market. At the same time, all-cash purchases increased slightly, reflecting continued interest from investors and wealthier buyers. Distressed sales, including foreclosures and short sales, remained low, indicating that while the market has slowed, widespread financial distress among homeowners has not yet emerged.

Looking ahead, the National Association of Realtors revised its forecast for the year, now expecting existing home sales to rise by only about 4 percent in 2026, down sharply from earlier projections. With affordability challenges, limited inventory, and elevated mortgage rates likely to persist, the housing market faces a challenging path toward recovery in the months ahead.