Home Prices in March Posted Biggest Annual Decline in 11 Years

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Home Prices in March Posted Biggest Annual Decline in 11 Years
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Home sales fell across the U.S. in March, a sluggish start to the crucial spring selling season as higher mortgage rates squashed momentum from the previous month.

U.S. existing-home sales decreased 2.4% in March from the prior month to a seasonally adjusted annual rate of 4.44 million, the National Association of Realtors said Thursday. March sales fell 22% from a year earlier.

Home sales fell across the U.S. in March, a sluggish start to the crucial spring selling season as higher mortgage rates squashed momentum from the previous month.

U.S. existing-home sales decreased 2.4% in March from the prior month to a seasonally adjusted annual rate of 4.44 million, the National Association of Realtors said Thursday. March sales fell 22% from a year earlier.

Mortgage rates have fluctuated in recent months since hitting 20-year highs above 7% in the fall. The average rate for a 30-year fixed mortgage was 6.39% this week, up from 5.11% a year earlier and the first increase after five straight weeks of declines, according to Freddie Mac.

“The consumer appears to be very sensitive to changes in week-to-week mortgage rates,” said Lawrence Yun, NAR’s chief economist. “It almost appears that people are just waiting for the right rate before deciding or closing.”

Other housing data also pointed to slowing activity. Housing starts, a measure of U.S. home-building, fell 0.8% in March from February, the Commerce Department said this week. Residential permits, which can be a bellwether for future home construction, dropped 8.8%.

The housing market slowdown shows one of the main ways that the Fed’s aggressive interest-rate increases are rippling through the economy. Housing is one of the most rate-sensitive economic sectors, and high housing costs have been a big contributor to inflation.

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