U.S. existing home sales in March dropped 3.6% to a seasonally adjusted annual rate of 3.98 million, marking a nine-month low and undershooting forecasts of about 4.07 million.

Analysts attribute the slowdown to higher mortgage rates, tight supply, and affordability challenges that have weighed on demand.

Market participants will scrutinize upcoming data releases to determine whether the decline is temporary or part of a longer-term trend.

A slower pace of home sales could dampen consumer spending, construction activity, and overall economic resilience, with potential implications for Fed policy.

Goldman Sachs’ Q1 GDP tracking remains at 2.8% quarter-over-quarter annualized, suggesting the broader economy weathering the housing slowdown.

The Conference Board’s near-term expectations index fell to 70.9, signaling ongoing recession risks as it remains below 80 for the 14th straight month.

Analysts had expected only a mild dip, but current data point to a more pronounced slowdown in housing activity.

Mortgage rates remained a headwind, with the 30-year fixed average around 6.37% last week, up from earlier lows and contributing to a softer spring selling season.

For February, sales were revised up to 4.13 million, with the decline now linked in part to lagged effects from adverse weather earlier in the year.

NAR chief economist notes ongoing supply and affordability constraints, with some Northeast markets showing sharper competition despite overall slower demand.

While seasonal factors and short-term fluctuations may play a role, the persistent supply-demand gap remains a central concern for buyers and policymakers.

March’s softness is echoed by weaker consumer confidence and softer job growth, reinforcing the broader housing slowdown.