- SUMMARY
Home sales in the United States experienced a 4.3% decline in March compared to February, primarily due to surging mortgage rates that currently hover around 7.5%.
Despite an increase in housing supply by 4.7%, it was insufficient to offset the impact of higher borrowing costs.
Existing home sales are down 3.7% year-over-year, highlighting the ongoing impact of affordability challenges.
The median home price reached a record high of $393,500 in March, driven by limited inventory and high demand, particularly in the higher price tiers.
On the supply side, inventory has increased by 14% compared to March 2022, but it remains significantly below a balanced market, which is typically defined by a six-month supply of homes for sale.
Notably, first-time homebuyers have made a modest recovery, accounting for 32% of sales in March, although their overall participation remains subdued.
Investors, on the other hand, have reduced their presence in the market, making up only 15% of sales.
The rise in home prices and mortgage rates continues to create affordability challenges, particularly for first-time buyers and those with lower incomes.
However, higher-tier homes priced above $750,000 have seen a surge in demand, as buyers in this segment are generally less affected by interest rate fluctuations.
Overall, the housing market is characterized as being stuck in a narrow range, with sales remaining low due to affordability constraints and limited inventory.
Despite some improvement in supply, the housing shortage continues to support homeownership costs.
- Key Takeaways
Mortgage rates and prices are affecting the stability of the housing market.
The increase in mortgage rates by 4.3% in March has resulted in a 3.7% year-over-year decline in existing house sales.
The rise in homeownership costs poses concerns.
The median home price has reached a record high of $393,500 in March, straining affordability for many prospective buyers.
The volatility in the housing market is evident.
The housing market is stuck in a narrow range, with sales remaining low due to affordability constraints and limited inventory.