Residential Real Estate Market Snapshot

Overview

The spring residential real estate market started slowly, with home sales activity declining in March. Traditionally, spring is the busiest season for real estate, but an increase in mortgage rates and inflation could be tempering housing sales.

Existing-home sales declined in March following a significant increase last month, which marked the largest monthly rise since February 2023. Year-over-year, all four U.S. regions recorded a decline in sales. In contrast, the Pending Home Sales Index (PHS) showed year-over-year increases in three out of the four regions, achieving its strongest performance in a year. Despite March’s slow market activity, NAR expects that inventory will grow steadily from home construction, job growth will keep demand strong, and life-changing events will require people to move.

Line graph: Existing-Home Sales, February 2016 to February 2024

Line graph: Pending Home Sales, February 2016 to February 2024

From a broad economic perspective, both the Federal Reserve’s short-term interest rate and the 10-year Treasury yield remained unchanged during the third month of the year. Nevertheless, March CPI inflation accelerated further from its target rate, possibly delaying the Federal Reserve’s plans to cut interest rates and keep mortgage rates high.

Line graph: Interest Rates, February 2016 to February 2024

March's employment growth is an important indicator to watch, as the construction industry experienced large job additions.

Line graph: Employment, February 2016 to February 2024

In terms of housing supply, new listings experienced a smaller year-over-year increase in the beginning of spring and the U.S. Census Bureau reported decreases in both housing starts and building permits.

Line graph: Housing Starts, February 2016 to February 2024

Line graph: Building Permits, February 2016 to February 2024

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