More homes are sitting on the market, fewer people are buying - and yet prices keep going up.
Existing home sales fell 3.6% in March to a rate of 3.98 million according to the National Association of Realtors, dropping from February and coming in 1% below where they were a year ago. It is the slowest sales pace in nine months.
The Northeast took the biggest blow, with sales dropping 8.5% from February and 12.2% from last year. The Midwest fell 4.8%, the South declined 3.5%, and the West dipped 1.7%.
Every region posted declines in both the monthly and annual comparisons.
NAR Chief Economist Lawrence Yun said lower consumer confidence and softer job growth are keeping buyers away, with higher mortgage rates adding to the pressure. The average 30-year fixed rate has hovered near 6.8% through March, well above the 5% to 5.5% range that many analysts said would be needed to unlock meaningful demand from buyers who have been sitting on the sidelines.
The national median sale price rose 1.4% from a year ago to $408,800, an all-time high for the month of March in data going back to 1999.
The reason is simple: There still are not enough homes for sale to bring prices down, even as demand weakens. Sellers have leverage on price while buyers have leverage on time and concessions - a rare split that defines this housing market.
Total inventory at the end of March stood at 1.33 million units, up 19.8% from a year ago but still representing just 4 months of supply at the current sales pace. A balanced market typically needs about 5 to 6 months of supply, so even with the inventory increase, the market remains structurally tight in most parts of the country.
First-time buyers made up just 28% of March sales, down from 31% a year ago and well below the historical average of around 40%. The combination of high prices, high rates, and rising insurance costs has made entry-level homeownership harder to reach than at any point since the data started being tracked.
Cash buyers remained a large share of the market at 26% of all transactions, as investors and wealthier purchasers who do not need mortgages continue to outcompete first-time buyers who are more sensitive to financing costs. That dynamic keeps prices firm even as mortgage-dependent demand falls off.
The lock-in effect continues to weigh on supply too. More than 80% of existing mortgage holders have rates below 5%, meaning they face a significant cost increase if they sell and buy a new home at today's rates.
That keeps potential sellers in their current homes and limits the number of listings available to buyers.
NAR just cut its full-year outlook, now expecting existing home sales to rise just 4% in 2026 instead of its earlier, more optimistic estimate. New home sales are expected to stay flat rather than growing 5% as builders pull back on new starts.
If mortgage rates hold above 6.5% through summer, this could be the weakest spring buying season in years. For real estate investors, the tension between rising prices and falling volume is the defining story of 2026.