The U.S. housing market experienced an uptick in activity in March, according to a new report from Zillow, despite elevated mortgage rates impacting affordability improvements seen earlier in the year [1]. Newly pending home listings increased by 4.6% compared to March of the previous year, marking the second-largest monthly total since the pandemic boom ended in August 2022 [1]. This surge in listings is considered a positive indicator as the spring home shopping season commences [1].
Mortgage rates rose from 5.98% at the end of February to 6.38% in late March, based on Freddie Mac data, resulting in a 1.5% increase in the typical mortgage payment from February [1]. The monthly mortgage payment for a typical U.S. home, excluding taxes and insurance and assuming a 20% down payment, was $1,789 in March. While this figure increased month-over-month, it was still 4.4% lower than the previous year [1].
Inventory levels also improved, with 1.23 million homes listed for sale in March. This represents a 9.5% increase from February and a 4.2% rise compared to a year earlier [1]. The number of new for sale listings reached 384,854 in March, up 0.1% year-over-year and 35.6% from February [1]. Newly pending listings grew 4.6% from a year earlier and 29.8% from February [1]. Preliminary data from Zillow's sales count nowcast shows that 300,398 homes were sold in March, up 3.7% year-over-year and 25.2% from February, though these figures are subject to revision [1].
Mischa Fisher, chief economist at Zillow, noted that buyers and sellers have been navigating uncertainty and market volatility since the pandemic, with current concerns over energy prices being no exception [1]. Fisher stated, "However, we have persistent signals that the market has turned a corner," citing pent-up demand from three years of low sales volume, winter storms earlier in the year, and the tailwind from lower mortgage rates as factors buoying the market [1]. Fisher also highlighted a rapid acceleration in daily page views per listing in March as a noteworthy improvement over recent years [1].
CONCLUSION
The U.S. housing market is showing signs of recovery as the spring season begins, with increases in listings, sales, and inventory despite higher mortgage rates. Market sentiment is cautiously optimistic, supported by pent-up demand and improved activity indicators. Analysts suggest the market may have turned a corner, but ongoing volatility and affordability challenges remain.