March Home Sales Drop: What It Means for Your Homebuying Plans and Wallet

If you're in the market for a home, you might have noticed fewer options and rising prices in March 2025, as existing-home sales took a noticeable downturn. According to the National Association of Realtors® (NAR), sales dropped 5.9% from February, settling at a seasonally adjusted annual rate of 4.02 million units. Compared to last year, you're seeing a 2.4% decrease in home purchases. Lawrence Yun, Chief Economist at NAR, explained that higher mortgage rates continue to limit affordability, making it tougher for you and other potential buyers to enter the market. He emphasized that fewer people moving could have broader impacts, potentially affecting overall economic mobility.

March Home Sales Drop

On the bright side, if you're actively looking, you'll notice inventory levels have improved significantly. By the end of March, available homes reached 1.33 million units, up 8.1% from February and nearly 20% more than last March. Currently, there's a 4-month supply of unsold homes, offering you a better selection compared to earlier months.

However, higher prices remain a hurdle. The median existing-home price climbed to $403,700, a 2.7% increase from last year's $392,900. Prices rose across all regions, reflecting ongoing strength in property values despite fewer sales. Yun noted that your household wealth is likely benefiting from real estate, as residential properties continue to represent a significant source of financial stability, valued at around $52 trillion nationwide. Thankfully, recent price increases have been moderate, slightly trailing wage growth, which could gradually make homeownership more accessible to you and others in the future.

If you're selling, homes are moving somewhat quickly—averaging 36 days on the market, faster than February but slightly slower than last year’s 33 days. First-time homebuyers, like many of you, made up 32% of March sales, a stable share compared to last year.

Cash buyers accounted for 26% of transactions, showing a slight decline from previous months. Investors and second-home buyers, perhaps your competition, maintained a consistent 15% share. Distressed sales were minimal, at just 3%. Mortgage rates remain elevated, averaging 6.83% for a 30-year fixed-rate loan as of mid-April—higher than the previous week but still better than last year’s 7.1%.

Here's a quick snapshot of what's happening regionally:

• Northeast: Your area experienced a 2.0% monthly decline in sales, stable year-over-year. Median home price rose to $468,000, up 7.7%.

• Midwest: Sales were down 5.0% monthly and 3.1% annually, with median prices climbing 3.5% to $302,100.

• South: Home purchases declined 5.7% from February and 4.2% year-over-year. Median prices slightly increased by 0.6% to $360,400.

• West: You saw the biggest monthly drop at 9.4%, yet year-over-year sales still rose 1.3%. Median prices increased 2.6% to $621,200.

Source: National Association of Realtors® via Realty Times