Spring's normally-busy housing market slows amid uncertainty

It’s spring, and the real estate market is supposed to be hopping. But new data out this week from the National Association of Realtors shows that, if you take that expected busyness into account, sales of existing homes in March were actually down 3.6%.

The extent of the drop was a bit unexpected, according to Stephanie Moulton, a professor and incoming acting dean at John Glenn College of Public Affairs at The Ohio State University.

“I see it more as a symptom, not necessarily that we're going to be constantly down month over month, but that there just is still a lot of uncertainty in the economy,” she said.

The market is operating about 80% of a normal spring pace, per Nadia Evangelou, principal economist and director of real estate research at the National Association of Realtors.

“So yes, we're seeing more homes hit the market. That's positive, but many of those homes are still priced above what typical households can comfortably afford,” she said — especially considering mortgage interest rates.

Ali Wolf, chief economist at Zonda, pointed out that the March sales data largely predate the war in Iran. “The market already didn't look particularly good going into Iran. And now we don't have perfect data as to how the market has evolved, but I would guess that the market has gotten even slower since.”

A lot of buyers were already frustrated with interest rates and grocery prices, she noted. “Now, we're layering in the cost of transportation that's gotten more expensive, so I think that that is keeping some consumers on the sidelines as well.”

A market that continues to be soft, Wolf added, means sellers might get fewer offers, while buyers could explore their options and perhaps even negotiate a better deal.