Rising interest rates drag down housing market recovery, US existing home sales drop to nearly ten-month low.

As the traditional sales peak season of spring approaches, the US real estate market shows signs of fatigue. The latest data shows that in March, existing home sales in the US fell to the lowest level since June of last year, highlighting the challenges faced by the housing market in the face of rising interest rates and affordability pressures. According to data released by the National Association of Realtors, existing home sales in March declined by 3.6% compared to the previous month, with an annualized sales volume of 3.98 million units, below market expectations. The report shows that signings have generally declined across all regions in the US, with sales in the Northeast falling to the lowest level on record since 1999, and the Midwest region recording its weakest performance since 2011. Analysis suggests that the spillover impact of the Middle East conflict on the US economy is beginning to show. As tensions escalate between the Trump administration and Iran, energy prices rise, leading to a significant increase in mortgage rates, further exacerbating the cost pressures of home buying and suppressing potential demand. Meanwhile, the National Association of Realtors has significantly reduced its forecast for existing home sales growth in 2026 from the previous 14% to 4%. The organization's chief economist points out that the rise in mortgage rates is the main reason for adjusting expectations. In terms of prices, the median price of existing homes in March rose by 1.4% year-on-year to $408,800, indicating that prices still have some support in a situation where supply remains tight. Inventory-wise, existing home supply rose to a four-month high, but overall remains at historically low levels. It is worth noting that first-time homebuyers account for about one-third of purchases, reflecting that essential demand still remains resilient. However, the issue of housing affordability continues to be a core contradiction in the market under the dual pressures of high interest rates and high housing prices. At the policy level, the Trump administration is attempting to boost the real estate market through various measures, including proposing restrictions on institutional investors purchasing single-family homes to improve opportunities for residents to buy homes.