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Existing home sales fell by 2.4% from February to March to a seasonally adjusted rate of 4.44 million, according to new data from the National Association of Realtors (NAR). On a year-over-year basis, sales dropped by 22% from the 5.69 million level from March 2022.

The decline in sales came despite an expansion of total housing inventory – 980,000 units by the end of March, up 1% from February and 5.4% from one year ago – and a drop in the median existing home price for all housing types – $375,700 by the end of last month, a 0.9% year-over-year drop.

“Home sales are trying to recover and are highly sensitive to changes in mortgage rates,” said NAR Chief Economist Lawrence Yun. “Yet, at the same time, multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand. It’s a unique housing market.”

First-time buyers were responsible for 28% of sales in March, up from 27% from the previous month but down from 30% from the previous year. All-cash sales accounted for 27% of transactions in March, down from 28% in February and in March 2022, while individual investors or second-home buyers purchased 17% of homes in March, down from 18% in the previous month and the previous year. Distressed sales represented a scant 1% of sales in March, nearly identical to last month and one year ago.

Properties typically remained on the market for 29 days in March, down from 34 days in February but up from 17 days in March 2022; 65% of homes sold last month were on the market for less than a month.