Spring Housing Market Faces Early Setbacks

The housing market is facing a tough start to the spring season. The reason is a mix of higher mortgage rates and worries about the economy. This has led to a slowdown in home sales. In March, sales of previously owned homes dropped by 5. 9% compared to February. This brings the annualized rate to 4. 02 million units. This is the slowest pace since 2009. Compared to March of last year, sales were down by 2. 4%. This slowdown was seen across all regions, with the western part of the country seeing the biggest drop, over 9%. The western region is known for its high prices. However, it was the only region to see a year-over-year gain. This was due to strong activity in the Rocky Mountain states, where job growth is robust. The sales figures are based on closings. This means the contracts were likely signed in January and February. During this time, the average rate on the popular 30-year fixed mortgage was over 7%. It was not until February 20 that the rate fell solidly below 7%. This drop in sales is a sign of the challenges people face when trying to buy a home. High mortgage rates make it harder for people to afford homes. This lack of movement in the housing market could lead to less economic mobility for society. This is a troubling possibility. Despite the drop in sales, there was a sharp increase in available listings. At the end of March, there were 1. 33 million units for sale. This is an increase of nearly 20% from March of last year. At the current sales pace, this is equivalent to a 4-month supply. This is still on the lean side. A 6-month supply is considered a balanced market between buyers and sellers. More inventory and slower sales are starting to put a chill on prices. The median price of an existing home sold in March was $403, 700. This is still an all-time high for the month. However, it is only up 2. 7% from last March. This annual comparison has been shrinking since December. It is the smallest gain since August. First-time buyers made up 32% of the market in March. This is the same as the same month last year. Historically, they make up roughly 40% of the market. All-cash sales dropped to 26% from 28% the year before. However, investors held steady at 15% of sales. This shows that investors are still active in the market. They are not being deterred by the slowdown in sales. The housing market is facing a tough start to the spring season. However, there are signs that the market is starting to balance out. This could lead to more opportunities for buyers in the future.