US existing home sales drop to nine-month low in March amid tight supply

U.S. existing home sales fell to a nine-month low in March amid tight inventory ​and growing concerns over the labor market, and a recent increase in mortgage rates because of the war with ‌Iran could limit activity this year.

Home sales dropped 3.6% last month to a seasonally adjusted annual rate of 3.980 million units, the lowest level since June 2025, the National Association of Realtors said on Monday. Economists polled by Reuters had forecast home resales easing to a rate of 4.06 million units.

Existing home ​sales are counted at the closing of a contract. Last month's sales probably reflected contracts that were signed in January and ​February when mortgage rates were falling. Sales dropped in all four regions. Overall sales decreased 1.0% on ⁠a year-over-year basis in March.

"Inventory remains a major constraint on the market," NAR Chief Economist Lawrence 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 labor market ​has been lackluster, with nonfarm payrolls declining in six of the last 15 months. The housing market also remains constrained by higher mortgage rates.

The U.S.-Israeli war with Iran has boosted oil prices and sent U.S. Treasury yields rising amid worries about inflation. The government reported last week that monthly consumer prices increased by ​the most in nearly four years in March.

Mortgage rates track Treasury yields. The popular 30-year fixed-mortgage rate averaged 6.37% last week, up from ​5.98% on the eve of the war, data from Freddie Mac showed.

It had dropped after President Donald Trump ordered Freddie Mac and Fannie Mae to ‌expand purchases ⁠of mortgage-backed securities. Housing affordability has become a potent political issue ahead of the November midterm elections, with the quintessential American dream of homeownership increasingly out of reach for many.