March Home Sales Dropped 4% as Housing Costs Rose to New Highs

The spring housing market is off to yet another record-breaking start after March homes sold well above list prices and at their fastest pace ever, according to Redfin. The median home-sale price rose 6.2% during March, the fastest seasonally-adjusted month-over-month gain since 2013, but as affordability becomes harder to find and more buyers are priced out, a market slowdown could be just around the corner, experts say.

Seasonally-adjusted active listings dropped 13%year-over-year to a new all-time low in March, the latest blow to the home building sector after years of supply chain disruptions hindering new home construction. As a lack of inventory and rising mortgage rates become status quo for the spring market, buyers are backing out and waiting for conditions to improve.

“Although pricey coastal markets began showing early signs of a slowdown in late March, nationwide sales data for the full month reflects the hottest March market on record, since homes that sold last month mostly went under contract in February,” said Redfin chief economist Daryl Fairweather. “We expect the combination of surging mortgage rates and record-high home prices to cause more homebuyers to drop out of the market. Unfortunately, homeowners are turning their back on the market too. Instead of being motivated to list before prices weaken, potential home sellers may be choosing to wait-out the impending market cooldown.”

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