Housing Research Brief

Home sales fall again as interest rates tick back up. After climbing to a five-month high during February, the pace of home sales regressed in March as the latest Federal Reserve rate hike helped push borrowing costs upward. The average 30-year fixed-rate mortgage had settled to 6.3 percent across the opening two months of 2023, prompting more prospective homebuyers to pursue listings. However, the mean borrowing rate ticked back above 6.5 percent in March as the Fed lifted the overnight rate for the ninth time in 12 months. This movement discouraged buyers from exploring listings and further disincentivized owners locked into lower rates from putting homes on the market. As a result, the pace of purchases fell 21 percent year-over-year, while the number of houses for sale dropped to an 11-month low. The scarcity of listings is offsetting weaker buyer demand and keeping prices firmly elevated. In March, the median sale price of an existing home rose to $385,900, up about 1 percent from the onset of this year.