According to Zillow‘s most recent market analysis, during what is usually one of the most competitive months of the year for house buyers, inventory increased and home price growth slowed. That’s even though in March mortgage rates hit a 2025 low.
“More sellers came out to test their luck as rates ticked down in March, but home sales didn’t keep up. Buyers—especially first-timers without equity to pour into their down payment—continue to struggle with affordability and now are facing even higher levels of uncertainty,” said Zillow Chief Economist Skylar Olsen. “A turbulent economy likely weighs more heavily on first-time buyers than more firmly established sellers.”
March had a strong showing from sellers, who listed over 375,000 houses, up over 9% from the same period the previous year. Listing activity is increasing month over month and closely following seasonal tendencies, even though it is still roughly 19% below a normal March prior to the epidemic.
What Does This Mean for Buyers?
Buyers failed to keep up as sellers pressed the gas pedal. Although typical mortgage rates were lower this year—some 6.65% on average in March, compared to 6.82% last year—newly pending sales were virtually unchanged from the previous year. In March, almost 265,000 listings entered a pending sale, which is 110,000 fewer than what was first listed.
Due to this discrepancy, inventory increased to 1.15 million properties, which is 19% more than the previous year and the highest level of inventory buyers have seen in March since 2020. Currently, inventory is 24% lower than the average for this time of year in 2018 and 2019. Compared to March 2023 and March 2024, when inventories was down 43% and 36%, respectively, from pre-pandemic levels, it is a discernible improvement.
Competition cooled and home price growth slowed dramatically as more options became available. Unadjusted for seasonality, the average home value increased by 0.2% month over month in March. The second-worst growth rate for this time of year was 0.7%, making that by far the slowest growth since at least 2018. However, only five major metro areas saw monthly declines in property values: San Antonio and the four main Florida markets. Nationally, property prices have increased by 1.2%, which is a modest but positive increase over the previous year.
Key Findings:
Inventory & New Listings:
- New listings increased by 31.5% month over month in March.
- New listings increased by 8.5% this month compared to last year.
- New listings are -19% lower than pre-pandemic levels.
- Total inventory (the number of listings active at any time during the month) in March increased by 10.5% from last month.
- The median age of inventory — the typical time since the initial list date for active for-sale listings — was 51 days.
- There were 19.3% more listings active in March compared to last year.
- Inventory levels are -24% lower than pre-pandemic levels for the month.
Home Values:
- The typical U.S. home value is $359,741.
- The typical monthly mortgage payment, assuming 20% down, is $1,855.
- Home values climbed month over month in 41 of the 50 largest metro areas in March. Gains were biggest in San Jose (1.3%), Milwaukee (0.9%), San Francisco (0.9%), Pittsburgh (0.8%), and Hartford (0.7%).
- Home values fell, on a monthly basis, in five major metro areas. The largest monthly drops were in Miami (-0.4%), Tampa (-0.3%), Orlando (-0.2%), Jacksonville (-0.1%), and San Antonio (-0.1%).
- Home values are up from year-ago levels in 34 of the 50 largest metro areas. Annual price gains are highest in San Jose (5.5%), Cleveland (5.3%), Providence (5.2%), New York (4.8%), and Hartford (4.7%).
- Home values are down from year-ago levels in 16 major metro areas. The largest drops were in Austin (-4.6%), Tampa (-4.5%), San Antonio (-2.7%), Phoenix (-2.5%), and Dallas (-2.4%).
- The typical mortgage payment is up 0.3% from last year and has increased by 108.8% since pre-pandemic.
U.S. Rents:
- Asking rents increased by 0.6% month over month in March. The pre-pandemic average for this time of year is 0.5%.
- Rents are now up 3.5% from last year.
- Rents fell, on a monthly basis, in one major metro area: Buffalo (-0.2%). Louisville held steady (0%) while Philadelphia (0.1%), Miami (0.2%), and Milwaukee (0.2%) saw the smallest gains.
- Rents are up from year-ago levels in 47 of the 50 largest metro areas. Annual rent increases are highest in Hartford (6.8%), Cleveland (6.7%), Providence (5.9%), Chicago (5.8%), and Columbus (5.8%).
Buyers continue to struggle with affordability. In March, a 20% down payment on a typical property required around 35.3% of the national median household income to cover the mortgage payment. Although it is marginally better than it was the previous year, it is still too expensive. A 20% down payment is a high barrier to entry, amounting to almost $72,000 on the average U.S. home, and spending more than 30% of income on housing is regarded as a financial hardship.
In an effort to close the gap with buyers, sellers slashed prices at historically high rates. In March, almost 23% of Zillow listings had their prices lowered, the largest percentage for any March since at least 2018.
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