In the ramp-up to peak home-buying season, sales of existing homes fell dramatically in March, according to data from National Association of Realtors.

In the latest troubling sign for the economy, sales were down 5.9% compared with a month earlier and 2.4% compared with a year ago.

What You Need To Know

  • Sales of existing homes fell 5.9% in March compared with a month earlier and 2.4% compared with a year ago, according to the National Association of Realtors

  • Sales fell in all four major regions of the United States but were most pronounced in the Midwest and South

  • The median price for an existing home climbed to an all-time high of $403,700 for the month of March

  • On Thursday, Freddie Mac reported the average rate for a 30-year, fixed-rate mortgage is 6.81%

Sales fell in all four major regions of the United States but were most pronounced in the Midwest and South, as the median price for an existing home climbed to an all-time high of $403,700 for the month of March.

“Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates,” NAR Chief Economist Lawrence Yun said in a statement accompanying the new sales data Thursday. 

While home price growth has slowed compared with the past few years, mortgage rates remain far higher than they were during the pandemic, when many homeowners locked in ultra-low rates. On Thursday, Freddie Mac reported the average rate for a 30-year, fixed-rate mortgage is 6.81%.

“Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society,” Yun said.

The total number of homes available for sale at the end of March was up 8.1% from February and 19.8% from a year ago to about 1.11 million. But with the median existing-home price increasing 2.7% from a year ago, more homes are going unsold. 

“In a stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights,” Yun said. 

On Thursday, Zillow reported a threefold increase in the number of cities where starter homes cost $1 million. Before the pandemic, 85 cities had million-dollar starter homes. Now 233 cities do. Half of the cities with million-dollar starter homes are in California.

Nationwide, the typical starter home costs $192,514, Zillow said.

“Cities with $1 million starter homes still represent a small piece of American real estate yet are a striking symbol of how the pandemic housing boom reshaped affordability,” Zillow said in a statement. “Many young households are postponing homeownership.”