Existing home sales hit a nine-month low in March.

Spring selling season disappoints

Sales of previously occupied U.S. Homes dropped 3.6% in March from February to a seasonally adjusted annual rate of 3.98 million units, the National Association of Realtors reported Monday. That pace missed economists' expectations; FactSet had forecast roughly a 4.06 million annual rate. Spring is usually the busiest time for the housing market, but this year, many buyers stayed on the sidelines.

The decline left March sales 1% below their level a year earlier, driven by pullbacks in the Northeast and Midwest. The NAR data show sales have been bouncing around a roughly 4 million annual pace going back to 2023. For context, a typical historical pace is about 5.2 million sales per year — so the market is still well short of normal volumes.

“Lower consumer confidence and softer job growth continue to hold back buyers,” said Lawrence Yun, chief economist at the National Association of Realtors. Yun pointed to weak sentiment and labor-market worries as barriers keeping potential buyers from moving.

Spring usually brings more listings and more bidding. Not this time.

Prices keep rising even as transactions slow

Prices haven't followed the sales slump. The national median sales price rose 1.4% in March from a year earlier to $408,800 — the highest March median on record back through 1999. Home prices have climbed on an annual basis for 33 straight months, NAR said, even as the number of transactions stays low.

The combination of rising prices and falling sales clearly shows how supply and buyer behavior are affecting the market. Sellers who list are often asking more, and many buyers who can afford higher payments are still competing. But a large segment of would-be buyers remains priced out or wary of committing while wages and hiring show uneven signs.

Inventory has increased in some metro areas, in part because homes are taking longer to sell. More listings don't necessarily mean lower prices when demand is concentrated in certain price ranges or neighborhoods. And sellers who don’t need to move right away are often holding out for top offers.

Rates edged down, then up — timing matters

Mortgage costs helped explain last month's pattern. Homes that closed in March likely went under contract in January and February, when the average 30-year mortgage rate ranged from 5.98% to 6.16%, according to mortgage buyer Freddie Mac. Those were the lowest levels in about three and a half years and briefly gave buyers more breathing room.

But mortgage rates began to tick higher in March. Energy-price jitters tied to tensions with Iran pushed up Treasury yields, a benchmark lenders watch when setting loan pricing. Freddie Mac reported the average 30-year fixed mortgage rate at about 6.37% last week.

The difference between a 6.0% and a 6.4% mortgage can add a few hundred dollars to monthly payments on a median-priced home, which can really affect a buyer’s decision. For many, affordability is measured in monthly payments, not headline rates.

What the data imply for buyers and sellers

Lower rates in early 2026 drew some shoppers back to the market, but the uptick in rates and weak consumer sentiment undercut that momentum. The NAR's short-term expectations index — a snapshot of Americans' views on income, business conditions and jobs — fell 1.7 points to 70.9. That reading has been under 80 for 14 straight months, a streak that Yun says can signal recessionary worries for households weighing big purchases.

For buyers who locked in offers late in the winter, the cheaper financing helped close deals. For those still shopping, the March rise in mortgage costs likely pushed monthly payments out of reach for some. Sellers, meanwhile, are seeing strong price metrics on average, but many high-priced or move-up households are reluctant to list if they face the prospect of paying more on a new mortgage.

At the moment, the market is divided. Entry-level buyers face limited inventory and tough competition in affordable segments. Move-up buyers face higher borrowing costs if they sell and re-buy. And investors are watching returns closely before adding properties to portfolios.

Outlook: mixed signals and a cautious forecast

Since mortgage rates started climbing in 2022, the housing market has been struggling. Transactions stayed near 30-year lows last year and have remained sluggish so far in 2026. Economists and industry experts are watching small changes in rates and job reports closely to see if the market will recover or slide further.

FactSet's economist consensus had expected a slightly stronger March for sales than the NAR showed. That miss, combined with the uptick in rates, prompted National Association of Realtors' chief economist Lawrence Yun to trim his 2026 expectations for existing-home transactions. Yun didn't provide a new numerical target in the NAR release, but he tied the revision to the combination of softer buyer confidence and the recent rise in borrowing costs.

Buyers trying to time the market are keeping a close eye on Freddie Mac’s weekly mortgage rate updates. If rates retreat, some of the sidelined demand could return. If rates keep moving up, the already-faint recovery seen early this year could stall.

Regional contrasts and longer-term trends

March's decline wasn't uniform. The Northeast and Midwest led the year-over-year drops, while other regions showed smaller shifts or modest gains. Local markets are diverging: some metros that saw rapid price gains in 2020–22 are now cooling, while others still show strong buyer competition.

Longer term, demographic trends — household formation, migration, aging homeowners — will shape demand. For now, the immediate drivers are mortgage pricing, job growth, and household confidence. Those three things together decide whether a sidelined buyer signs a contract or keeps waiting.

Frankly, it's a slow-motion tug-of-war between prices and payments.

Sales and pricing data for March give a clear snapshot but not a final verdict. The market is responding to rate moves and economic signals in real time, and small shifts in borrowing costs can matter a lot to balance sheets and budgets.

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The national median existing-home price in March was $408,800, a March record, NAR said.