The Blubber

The housing market just experienced its weakest March since the global financial crisis, dragged down by elevated borrowing costs and declining consumer confidence in the broader economy.

Sales of previously owned homes fell to an annualized pace of 4 million units last month — the lowest March level since 2009 — marking a 5.9% drop from February, according to data released Thursday by the National Association of Realtors (NAR). The decline dealt a blow to hopes for a spring rebound.

The slowdown is particularly striking given that March usually sees a seasonal uptick in homebuying activity. But this year’s spring season has been clouded by ongoing financial market volatility and growing concern over the economic outlook, driven in part by President Donald Trump’s aggressive tariff policies affecting all major U.S. trade partners.

“I had anticipated more transactions with greater inventory, but the data clearly show that higher mortgage rates and affordability concerns are keeping buyers on the sidelines,” said NAR Chief Economist Lawrence Yun.

The housing market has been sluggish in recent years due to a combination of soaring home prices during the pandemic and sharply higher mortgage rates.

Mortgage rates jumped to 7.8% in 2023, up from a pandemic low of 2.7% in 2020. That increase created a double bind: home purchases became far more expensive for buyers, and sellers were reluctant to give up their ultra-low existing rates, shrinking available inventory.

Economists had expected 2025 to bring some recovery as more homes came on the market, but sales have yet to rebound.

“It appears the mortgage rate is still the key driver for the housing market,” Yun said. “Recent stock market turbulence may also have rattled potential buyers and caused them to pause.”

Mortgage rates tend to follow the 10-year Treasury yield, which has climbed recently amid market volatility linked to Trump’s trade war. As of Thursday, the 10-year yield was at 4.3%, while the average rate on a 30-year fixed mortgage stood at 6.8%, according to Freddie Mac.

“Given typical spreads, mortgage rates today should be closer to 6.3% or even 6%,” Yun said. “Instead, we’re still hovering near 7%.”