March 2025: The Slowest Home Sales Since 2009—What Happened?
The U.S. housing market in March and April 2025 experienced a notable slowdown, with existing-home sales in March dropping to the lowest level for that month since 2009. Despite an increase in inventory, high mortgage rates and economic uncertainties have kept many potential buyers on the sidelines.
March 2025: Sales Hit a 16-Year Low
According to the National Association of Realtors, existing-home sales fell 5.9% in March to a seasonally adjusted annual rate of 4.02 million units, marking a 2.4% decline compared to March 2024 . This significant drop reflects the challenges buyers face amid affordability concerns.
The median existing-home price rose 2.7% year-over-year to $403,700, setting a record high for March. Inventory levels increased to 1.33 million units, up 8.1% from February and 19.8% from a year ago, equating to a 4.0-month supply at the current sales pace .
April 2025: Inventory Grows, Sales Remain Sluggish
In April, the housing market saw a 30.6% year-over-year increase in the inventory of homes for sale, marking the 18th consecutive month of inventory growth . Despite more options for buyers, pending home sales fell 3.2% compared to the previous year, indicating continued hesitation in the market.
The median days on market increased to 50 days, four more than a year ago, and 18% of listings saw price reductions, the highest share for any April since at least 2016 .
Factors Contributing to the Slowdown
High Mortgage Rates: The average 30-year fixed mortgage rate hovered around 6.83% in April, up from 6.62% earlier in the month, making monthly payments more burdensome for buyers .
Economic Uncertainty: Concerns over economic stability, including new tariffs and potential recession fears, have made buyers more cautious .
Affordability Challenges: The median monthly housing payment in the U.S. reached $2,848, just $8 below the all-time high, further straining potential buyers' budgets .
Dan's Take
As a real estate professional, it's clear that the market is experiencing a significant shift. Buyers are more cautious, and sellers need to adjust their expectations. The increase in inventory provides more options, but affordability remains a critical issue. It's essential for both buyers and sellers to stay informed and work with professionals who can navigate these challenging times.
Conclusion
The spring of 2025 has proven to be a challenging period for the housing market, with sales slowing despite increased inventory. High mortgage rates and economic uncertainties continue to impact buyer behavior. Staying informed and adaptable is key for anyone looking to buy or sell in this market.
