The pace of existing-home sales fell in March, the first month of the Iran war, as global energy and trade shocks stemming from the conflict began hitting household budgets and eroding homebuyers’ purchasing power.
Mortgage rates that surged from the high-5% range in February to around 6.5% at the end of March suppressed sales across the North, South, West and Midwest housing regions, according to the National Association of Realtors, which released updated sales data on Monday.
The 3.6% monthly decline put the annual pace of existing-home sales at 3.98 million units in March, about 1% below year-ago levels. Sales were up 2.2% year over year in the South and 1.3% in the West, but fell 12.2% in the Northeast and 3.2% in the Midwest.
After plunging 4.4% below year-ago levels in January — a pullback widely attributed to severe winter weather nationwide that month — existing-home sales rebounded in February as the cost of 30-year fixed-rate mortgage financing eased to its lowest levels in years.
“Lower consumer confidence and softer job growth continue to hold back buyers,” said NAR Chief Economist Lawrence Yun in a statement accompanying the trade group’s March home sales report, underscoring how sales last month “remained sluggish and below last year’s pace.”
As of early April, consumer confidence had continued retreating, with the University of Michigan reporting that economic anxieties over the Iran war had deepened even further than consumers’ “Liberation Day” tariff concerns in April 2025.
The share of all-cash transactions among total existing-home sales was 27% in March, down from 31% in February. First-time buyer share dipped to 32% in March from 34% the previous month, while the 18% purchase share among investors and second-home buyers reflected a 2% increase from February.
The slowdown in sales corresponded with a 0.4% monthly increase in the existing-home sales price to $408,800, in addition to 3% monthly growth in unsold homes to 1.36 million. That equates to roughly 4.1 months’ supply of homes, a measure that reflects how long it would take to exhaust the current inventory of homes at a given sales pace.
Yun called persistent inventory shortages affecting markets nationwide a “major constraint on the market” that helped push median sales prices to their highest level on record for March, leaving the inventory-to-sales ratio, a measure of housing supply and demand, below historical norms.
About 300,000 to 500,000 more homes for sale could help balance out the market, Yun added.
“Even with a more modest pace of sales growth, home prices continue to steadily increase due to minimal inventory growth,” he said.
NAR also joined housing heavyweights Fannie Mae and the Mortgage Bankers Association in recently cutting their home sales forecasts for 2026 amid the fallout from the start of the Iran war on Feb. 28.
Citing the “upward trajectory of mortgage rates,” the Realtor association now expects existing-home sales to increase just 4% this year, compared to initial forecasts of 14% growth. New-home sales totals were revised lower to zero growth, down from earlier projections of 5% sales growth among new builds.
