Existing home sales fell 2.7% in March to a seasonally adjusted annual rate of 4.02 million, according to the National Association of Realtors.
That's down from February's 4.13 million pace and well below the roughly 5.3 million homes that changed hands annually in the years before the pandemic.
The culprit isn't demand — it's the math of buying a home in 2025.
The median existing-home price climbed to $403,700, up 3.8% from a year earlier and the highest March on record.
Mortgage rates hovering near 6.6% mean a buyer putting 20% down on that median home faces a monthly principal-and-interest payment north of $2,000 before taxes and insurance.
Housing economists have a name for this: the affordability squeeze.
Anyone who has run the numbers lately calls it something less polite.
There were 1.33 million homes for sale at the end of March, up 19% year over year.
But that's still only a 4-month supply, and a balanced market needs closer to 6 months.
Roughly 60% of what's listed has been sitting for more than 60 days, according to Redfin, which means sellers are holding out for prices buyers won't pay.
The standoff has a clear loser: first-time buyers.
They made up just 32% of sales in March, down from 34% a year ago.
Historically, they account for about 40%.
Many are stuck renting while they save, and rent isn't cooperating either — asking rents are up in most metros.
The lock-in effect matters too: homeowners with 3% mortgages have little reason to sell and take on a 6.6% loan, which keeps supply tight in the starter-home segment where it's needed most.
Sales dropped in the Northeast and Midwest but ticked up slightly in the South, where new construction is adding supply.
Builders are picking up some slack by buying down mortgage rates, but those concessions mostly help buyers at higher price points.
Cash buyers, meanwhile, made up 26% of March sales — a reminder that this market rewards people who don't need a loan.
What does this mean if you're shopping right now?
You have more leverage than you did two years ago.
Homes are sitting longer, and sellers are cutting prices in many markets.
That said, "more leverage" isn't "cheap." If you're waiting for a dramatic crash, you're betting against a structural shortage of roughly 4 million homes that won't be fixed quickly.
If you're waiting for 4% mortgage rates, you may be waiting a long time.
Our take: the housing market is stuck in a slow-motion stalemate, and neither buyers nor sellers are blinking.
If you can afford the payment and plan to stay put for years, today's softer market gives you room to negotiate — inspections, repairs, closing costs.
Final Thoughts
If you're stretching to buy, don't let a little leverage talk you into a payment you can't handle when taxes and insurance inevitably rise.