The housing market experienced a significant slowdown in March, with sales of previously owned homes dropping by 4.3% compared to February. This marks a 3.7% decrease from the same time last year. Rising mortgage rates are believed to be the primary factor behind this decline, as the average rate reached around 7.5%.
The data, released by the National Association of Realtors, indicates that sales were based on closings from contracts signed in January and February. Regionally, every area saw a decrease in sales except for the Northeast. However, there was a slight improvement in inventory, which rose by 4.7% month-to-month.
The median price of an existing home sold in March was $393,500, showing a 4.8% increase from the previous year. The spring housing market is starting to become more competitive, with investors pulling back and first-time buyers making a comeback.
Lawrence Yun, chief economist at the National Association of Realtors, stated that the 7.5% mortgage rate serves as a psychological barrier for many potential buyers. It remains to be seen how the market will adjust to these higher rates in the coming months.
