Sharp Drop in Home Sales Invokes Fear for Crucial Selling Season

Introduction

The U.S. housing market, long a bellwether for the broader economy, experienced a significant setback in March 2025. Sales of existing homes plummeted 5.9% from the previous month, marking the sharpest monthly decline in more than two years and bringing activity to its slowest pace since 2009. This drop comes at the outset of the spring selling season—a period traditionally characterized by heightened activity and optimism among buyers and sellers. Instead, the market is confronting a confluence of challenges: elevated mortgage rates, persistent affordability concerns, rising inventory, and mounting economic uncertainty. The implications are profound, not only for the real estate sector but also for the wider economy, as housing remains a critical engine of growth and household wealth.

The Numbers: A Closer Look at March’s Housing Data

Sales Volume and Regional Breakdown