Sales of existing U.S. homes dropped 3.6% in March to their slowest pace in nine months, despite declining mortgage rates, as waning consumer confidence and softer job growth continued to dampen housing demand.
The housing slide exposes a tension in the economy: while mortgage rates have eased and jobless claims remain near historic lows, consumers are prioritizing caution over capitalizing on better borrowing costs, signaling deeper anxieties about employment stability and affordability.
Mixed Signals in the March Economy
Sales of existing homes collapsed in March even as lenders eased borrowing costs, a disparity that revealed deeper economic anxiety among consumers. The National Association of Realtors reported that existing home sales fell 3.6% in the month to a seasonally adjusted annual rate of 3.98 million units — the slowest pace since June 2025.
The decline underscores the limits of monetary accommodation when consumer confidence is fragile. Mortgage rates have eased: the average 30-year fixed rate mortgage dropped to 6.3% from 6.37% the previous week, according to Freddie Mac. A year ago, the same rate averaged 6.83%. Yet lower rates alone are not triggering the buying surge policymakers hoped for.
“Lower consumer confidence and softer job growth continue to hold back buyers,” Lawrence Yun, the National Association of Realtors’ chief economist, said in a statement.
Labor Market Holds, Inflation Gains
Employment data showed resilience. U.S. jobless claims for the week ending April 11 fell by 11,000 to 207,000, the Labor Department reported Thursday. The result came in below the 217,000 applications analysts surveyed by FactSet had expected and remained within the range of recent weeks, signaling that employers continue to show restraint on layoffs even as global tensions risk slowing growth.
That employment resilience contrasts with accelerating inflation. U.S. wholesale prices jumped 0.5% from February to March and 4% from a year earlier — the largest year-over-year gain in more than three years, the Labor Department reported Tuesday. Energy prices drove much of the increase, surging 8.5% month-over-month as the ongoing Iran war elevated global oil costs.
Food prices fell 0.3% in March, reversing the 2.4% surge from the previous month.
The mixed picture — solid employment against slowing housing and accelerating wholesale inflation — leaves the economic outlook uncertain. Consumer caution in the housing market suggests wariness about the future, even as employers continue to hire at a measured pace.