U.S. Existing Home Sales (March 2025)

U.S. existing home sales fall sharply in March, reverse prior month's unexpected gain

• Existing home sales fell a sharp 5.9% month-on-month (m/m) to 4.02 million units (annualized) in March – completely reversing February's large gain and coming in below the consensus forecast for a smaller pullback to 4.1 million. On a year-over-year basis, sales drew back 2.4%. 
• The decline was driven by the single-family segment, where sales fell 6.4% m/m. Sales in the smaller condo/co-op segment held flat at 380,000 units. 
• Activity was mixed on a regional basis. Sales fell 9.4% in the West, 5.7% in the South, 5.0% in the Midwest, and 2.0% in the Northeast.  
• Total housing inventory at the end of March was 1.33 million units, up 8.1% from February and 19.8% from a year ago (1.11 million). Measured at the current sales rate and seasonally adjusting, unsold inventory sat at 4.2 months' supply – up from 3.8 months in February, and 3.5 months in March 2024. 
• House price growth decelerated in March, with year-on-year gains easing to 2.7% from 3.4% in the month prior. On a seasonally adjusted basis, median home prices fell 0.9% m/m, marking the third consecutive monthly decline (seasonal adjustment performed by TD Economics).

Key Implications

• The March decline in existing home sales reflects some giveback from the sharp increase in sales the month prior. The fact that the scale of decline was quite pronounced – to the point where it completely erased last month's gain and then some – suggests that turbulent trade and other economic headlines have likely contributed to keeping more buyers on the sidelines. Beyond the main headline, today's report also speaks to a continued moderate increase in housing inventories and a recent cooldown in home price growth. 
• Mortgage rates have recorded large swings recently, corroborating the broader theme of elevated market volatility. But with rates still hovering near 7%, the current financing environment remains a tough one for buyers. More importantly though, an extension of the uncertainty that has characterized the last few weeks, along with concerns for a slowdown in economic growth and higher inflation, are likely adding to hesitancy among buyers. These elements combined don’t bode well for housing activity over the near-term, suggesting that a 'sustained' recovery in sales will take more time to find its legs. 

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