Existing Home Sales drop in March
Summary
Spurt in mortgage rates latest obstacle for Housing
Existing home sales dropped 4.3% in March, a decline that was widely expected given the slip in mortgage applications for purchase during February. March's decline appears to be payback from the solid gains registered in the first two months of 2024 brought on by increased supply and a temporary dip in mortgage rates. Through the monthly volatility, the pace of existing home sales has edged up recently, with the average pace of resales averaging 4.2 million so far this year, up from last year's low of 3.85 million.
Resales should continue to gradually pick up from their current slow pace in coming months as a sturdy macroeconomic backdrop continues to be supportive of demand. The road ahead is not without obstacles, however. Mortgage rates have spurted higher in recent weeks, with the average 30-year mortgage rate trending toward 7.5% as of this writing. The leg-up in financing costs amid new inflation and monetary policy uncertainty stands to inflame affordability pressures and limit the extent home sales rebound this year.
Author
Wells Fargo Research Team
Wells Fargo
