Real estate prices have just done it again. For the 33rd straight month, the median price of an existing home rose – this time to $408,800 in March, a record high for the month, according to the National Association of Realtors’. existing home sales report. Politicians from President Donald Trump to New York Mayor Zohran Mamdani have advocated for lower housing costs. So far the market is not cooperating.
The 1.4% year-on-year price increase came even as existing home sales fell 3.6% from February, a notable setback heading into what is typically the market’s busiest season.
Even as politicians across the country promise to build more homes at lower prices, inventory has not yet lived up to those promises and property prices remain high.
“Inventories remain a major constraint on the market,” said NAR Chief Economist Dr. Lawrence Yun in a statement. “The inventory-to-sales or supply-to-demand ratio is below historical norms. An additional 300,000 to 500,000 homes for sale would help bring the market closer to normal conditions.”
Property prices have risen 60% compared to pre-pandemic levels as the country suffers from a persistent housing shortage, which one estimate puts at about 4.7 million Zillow Report 2025. The market has gotten so bad that many young buyers are turning to the “Bank of Mom and Dad” for help, as the average age of first-time home buyers reached 40 last year. Some employers even pay out $6,500 to help some workers get started in the real estate industry.
Why the real estate market is lacking buyers despite growing inventory
The numbers become even more confusing in context. By most measures, this should be a buyer’s market. However, most buyers still cannot afford to act on it. In February, there were 46.3% more sellers than buyers in the U.S., a gap of 629,808 – the largest gap in real estate company Redfin’s records since 2013. That number is 30% higher than a year ago, when the gap was over 449,000.
On the other hand, homeowners are benefiting from this market: Yun noted that “the typical homeowner has accumulated $128,100 in real estate assets over the past six years.”
Chief Economist and Director of Real Estate Research at NAR [name needed] told Marketplace The market is still moving at about 80% of its normal spring pace. But home sellers are pricing their homes above market price. “We’re seeing more homes come on the market,” she said. “That’s positive, but many of these homes are still priced above what typical households can comfortably afford.”
In contrast, Yun said lower consumer confidence and weaker job growth had sidelined shoppers. “March home sales remained sluggish and below last year’s pace,” he said.
Michigan’s consumer sentiment index just hit its lowest point in its 74-year history. crashing to 47.6, below the previous record set in mid-2022, when inflation rose above 9%. This trend is expected to accelerate as the Iran war has driven up energy costs. Additionally, nearly three in five Americans believe AI will hinder their ability to buy a home as the technology threatens to automate jobs.
Mortgage rates are also increased and are at 6.37%, a slight decrease from last week. However, they threaten to rise further as the Iran war drives up oil prices. Although oil prices have fallen from a high of over $110, they remain high at around $94 a barrel.
“The threat of longer-term rising oil prices continued to keep Treasury yields elevated, and mortgage rates closed higher last week,” Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, said in a statement.
