The United States housing market faced a significant setback in March, as existing home sales declined sharply by 5.9 percent compared to the previous month.
Data released by the National Association of Realtors (NAR) revealed that the market has slowed to its weakest pace since the 2009 subprime mortgage crisis, signaling renewed concerns for the broader U.S. economy.
According to Newsweek, the decline highlights vulnerabilities that could deepen if current trends continue, especially with rising economic uncertainties.
The housing market’s downturn reflects persistent affordability challenges and growing hesitation among buyers, setting a cautious tone for the upcoming spring and summer seasons.
Sharp Decline in Existing Home Sales Across All Regions
According to the NAR report, the seasonally adjusted annualized rate of existing home sales fell to 4.02 million in March 2025. This marks the lowest level recorded since the Great Recession. The slowdown was observed across all four U.S. Census Bureau regions.
The West experienced the steepest decline at 9.4 percent, followed by a 5.7 percent decrease in the South, a 5 percent drop in the Midwest, and a 2 percent fall in the Northeast.
Despite the decline in transactions, the median home price rose by 2.7 percent year-over-year, reaching $403,700. All regions reported price increases. However, monthly growth was minimal, with data from Redfin showing a 0.2 percent rise between February and March 2025, the slowest monthly gain since December 2022.
Affordability and Mobility Concerns Grow
Experts suggest that persistent affordability challenges, mainly driven by high mortgage rates, are contributing to the sluggish housing market. Lawrence Yun, chief economist at the NAR, stated :
Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates. Residential housing mobility, currently at historic lows, signals the troublesome possibility of less economic mobility for society.
Adding to this analysis, Danielle Hale, chief economist at Realtor.com, commented :
The past few years have hinged on whether there would be enough sellers, but as the proverbial housing shelves are better stocked, 2025 is more likely to be about where there are buyers.
Data from Redfin highlighted additional signs of hesitation among buyers, with 52,000 home sales canceled in March 2025, representing 13.4 percent of all transactions. This figure marks the third-highest cancellation rate for a March since 2017.
Economic Uncertainty Fueled by New Tariffs
The recent data precedes the full implementation of new tariffs announced by President Donald Trump on April 2. These include a 145 percent tariff on most imports from China and a 25 percent tariff on imported automobiles. While some tariffs were delayed by 90 days, the immediate imposition of others could strain economic growth.
The International Monetary Fund (IMF) responded to the tariffs by lowering its U.S. growth forecast for 2025, from 2.7 percent to 1.8 percent, citing the tariffs as a significant risk factor. Analysts warn that the full impact on the housing sector and the wider economy is yet to materialize.
Efforts to obtain comment from the Department of the Treasury were made, but Newsweek reported that the department did not immediately respond to an email sent outside regular business hours on Friday.
