WASHINGTON: Sales of existing US homes pulled back more than expected in March, logging their biggest drop since late-2022 according to industry data released Thursday, as high mortgage rates weighed on affordability for homebuyers. Existing home sales slid 5.9 percent last month from February to an annual rate of 4.02 million, seasonally adjusted, the National Association of Realtors (NAR) said.

This was significantly below a 4.2 million rate expected in a Briefing.com consensus estimate, and marked the biggest month-to-month drop since November 2022, the association said on a call.

“Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates,” said NAR chief economist Lawrence Yun in a statement. The popular 30-year fixed-rate mortgage hovered around 6.7 percent as of mid-March, similar to levels for the same period last year.

Yun warned that residential housing mobility is “at historical lows,” signaling the “troublesome possibility of less economic mobility for society.”

“The big picture still is one of a very subdued housing market,” said Oliver Allen, senior US economist at Pantheon Macroeconomics. The market is “frozen by the gulf” between the typical rates on new mortgages, which are nearly seven percent right now, and rates on existing mortgages, which averaged 4.3 percent in the fourth quarter.

With mortgage rates elevated in recent times, current homeowners have been reluctant to enter the property market—after having locked in lower rates previously. “The tariff shock is unlikely to alter this dynamic dramatically and has so far worsened it at the margin,” Allen said, referring to sweeping new tariffs US President Donald Trump imposed this year. But he warned: “A hit to housing demand from the economic slowdown likely to follow the tariffs will add to the downward pressure on price growth.”

Robert Frick, corporate economist at the Navy Federal Credit Union, added: “Prices for home furnishing will likely rise soon due to tariffs, and rising anxiety among consumers over inflation and jobs may magnify the instinct to hunker down already being felt by many families.”

From a year ago, existing home sales fell 2.4 percent, the NAR said. The median price of previously-owned homes in March was up 2.7 percent from a year ago at $403,700 -- and all four US regions logged price hikes. Inventory jumped by 8.1 percent from February as of end-March, the NAR said, but Yun told reporters that the volume of units appears to still be “lagging.” — AFP