Inventories levels explode while existing home sales decline slightly

Although we’re still at the point in the season where inventories are supposed to build, they have increased by nearly 20% on a year-over-year basis, from 1,110,000 to 1,330,000, showing that people are hesitant to purchase a new home.  Additionally, while inventories have been increasing, the number of existing homes being sold has decreased slightly on a year-over-year basis, with March 2025 numbers coming in at 4,020,000, which is 2.43% lower than where they were last year.  Across the country, people are becoming more uncertain of whether or not they should move to a new home, and that is very clearly showing! 

This data is just for March though; it will be important to pay attention to how the market reacted to the beginning of the trade war when April’s numbers come out in a couple of weeks.  While it’s easy to see how things like the stock market and bond market react to big newsworthy events like this, real estate is incredibly illiquid, so it takes some time for things to play out!

As you might have expected, there was a considerable increase in the number of listings that have hit the market too.  For a few months in a row we have seen high single/low double-digit percentage growths in the number of new listings hitting the market in the US.  This is likely due to the fact that the people who were holding out for the return of lower interest rates are losing hope, and listing their homes anyway.  

On the bright side, mortgage rates have continued their slow descent, with the average interest rate on a 30-year mortgage in March coming in at around 6.63%, down roughly a quarter point from the year prior.  As you might expect, the median monthly P&I payment ticked down slightly, and the median sale price ticked up slightly to match this move.  

Although mortgage rates have come down a bit, it’s important to remember that the biggest drivers behind mortgage rates are, of course, the 10-year treasury and the federal funds rate.  In the most recent Federal Open Market Committee meeting, the Fed has decided to keep the federal funds rate in line with where it’s been over the past few months, despite many Americans feeling the effects of the trade war on their wallets.  

As we have discussed in prior months, the Fed is in no rush to lower interest rates anytime soon.  However, they do see a not-so-distant future where rates are a good bit lower.  When you combine this with the fact that inventories are building at a rapid rate, and the number of units being sold has fallen slightly, this could represent a fantastic buying opportunity!  

Ultimately though, this is just what we’re seeing at a national level.  As we all know, real estate is an incredibly localized industry, so knowing what’s going on in your own market is pivotal.  Below is our local lowdown, that outlines everything you need to know about what’s happening around you in your neighborhood and surrounding areas!

Big Story Data

The Local Lowdown