Illustration by Lanette\u00a0Behiry\/Adobe\u00a0Stock<\/p>\n
The rise in mortgage rates seen since the war in Iran began prompted NAR to revise its 2026 forecast, with only a 4% uptick in existing home sales now expected.<\/p>\n
The spring homebuying season is off to a listless start, with existing home sales coming in at the slowest pace for the month of March since the global financial meltdown of 2009.<\/p>\n
Sales drop across the country: The month’s seasonally adjusted annual rate of existing home sales hit a nine-month low of 3.98 million \u2014 down 3.6% compared to February<\/a> and a year-over-year dip of 1%, according to the National Association of Realtors<\/a>.<\/p>\n A variety of factors led to this low number, according to Bright MLS Chief Economist Lisa Sturtevant, who noted that the data reflects contracts signed in January and February. “Rising mortgage rates<\/a>, economic uncertainty and winter weather in many parts of the country stalled the housing market,” Sturtevant said, adding that the month-over-month drop in sales occurred “in all regions.”<\/p>\n Lower consumer confidence, constrained inventory and softer job growth<\/a> also held buyers back, noted Lawrence Yun, chief economist at NAR.<\/p>\n The biggest year-over-year decrease in existing home sales occurred in the Northeast, an indication that the unusually intense winter storms early in the year<\/a> may have negatively impacted housing market activity.<\/p>\n Sales were down 12.2% annually in the Northeast and down 3.2% in the Midwest. While sales in the South and West also dropped month-over-month, each region saw a small annual uptick of 2.2% and 1.3%, respectively.<\/p>\n Inventory is up: Though still viewed as limited, inventory did increase in March, rising 2.3% compared to a year ago. NAR’s report estimated that the U.S. has a 4.1- month supply of unsold inventory, up from 3.8 months in February.<\/p>\n Prices still on the rise: Existing home sales may have slowed, but prices continue climbing. The median sales price for an existing home was $408,800 in March, up 1.4% compared to a year ago. This marks the 33rd consecutive month of year-over-year price increases, according to NAR.<\/p>\n “Even with a more modest pace of sales growth, home prices continue to steadily increase due to minimal inventory growth,” Yun said in a news release accompanying the data.<\/p>\n NAR revises 2026 forecast: Amidst the global and economic turmoil caused by the war in Iran<\/a>, NAR also made a downward revision to its 2026 home sales forecast, with Yun crediting the rise in mortgage rates as the reason for the adjustment. While the association originally predicted a 14% increase<\/a>, it now expects annual sales to rise 4% this year. New home sales \u2014 originally projected to rise at a slower rate \u2014 are expected to remain flat.<\/p>\n What this means for the rest of 2026: There’s not much upside for existing home sales over the next several months, said Nancy Vanden Houten, lead economist at Oxford Economics.\u00a0<\/p>\n “We expect home sales to move sideways before starting to gradually rise at the end of the year,” Vanden Houten said.<\/p>\n Now in its seventh week, the conflict in the Middle East<\/a> will continue to impact home sales. The lack of a peace deal after marathon negotiations over the weekend and the White House’s announcement of a Strait of Hormuz<\/a> blockade sent oil prices higher. Rising energy prices could impact inflation and mortgage rates<\/a>, which have increased<\/a> since the war began.<\/p>\n