US existing home sales decreased in March as softening job growth and weaker consumer confidence continued to deter potential buyers, data from the National Association of Realtors showed Monday.
Sales fell 3.6% sequentially to a seasonally adjusted annual rate of 3.98 million units last month. The consensus was for a 0.8% decline, according to a survey compiled by Bloomberg. Sales declined in all regions month on month.
"Lower consumer confidence and softer job growth continue to hold back buyers," NAR Chief Economist Lawrence Yun said.
US consumer sentiment hit the lowest on record this month, reflecting heightened worries about higher prices and the overall economic fallout from the Middle East conflict, University of Michigan's preliminary survey showed Friday.
The US and Iran failed to reach a deal during negotiations in Pakistan over the weekend, fueling concerns about the durability of an already fragile ceasefire between the two sides.
The average 30-year fixed-rate mortgage increased to 6.18% last month from 6.05% in February, the NAR added, citing Freddie Mac data.
"We don't see much upside for sales over the next several months," Oxford Economics Lead Economist Nancy Vanden Houten said in remarks e-mailed to. "Given the backup in mortgage rates since the start of the war with Iran, we expect home sales to move sideways before starting to gradually rise at the end of the year."
Single-family home sales dropped 3.5% month over month to 3.63 million units in March, while condominium and co-op sales fell 5.4% to 350,000 units, NAR data showed.
"Inventory remains a major constraint on the market," Yun said. "An additional 300,000 to 500,000 homes for sale would help bring the market closer to normal conditions and allow consumers to make purchase decisions without feeling rushed."
The median sales price of existing homes rose 1.4% year over year to $408,800, marking the 33rd straight month of annual gains, according to the report.
"The supply of homes for sale rose in March, but increases are to be expected at the start of the spring home selling season," Vanden Houten said. "Higher mortgage rates will keep some sellers on the sidelines, leaving inventory relatively tight."