The US housing market continues to face significant challenges, with affordability and inventory shortages remaining the biggest hurdles for prospective buyers. Here are some of the key developments making headlines today:

Existing Home Sales Declined Again in March

• Existing home sales fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, according to the National Association of Realtors (NAR) as discussed in Existing-Home Sales Descended 4.3% in March. This reverses roughly half of the surprise jump seen in February.
• The median existing-home price for all housing types was $375,700, up 0.9% from March 2023. This marks 130 consecutive months of year-over-year home price increases, the longest-running streak on record.
• Total housing inventory rose 4.7% from February to 1.11 million units, but remains 22.2% lower than a year ago. The months’ supply of homes increased to 3.2, still well below the 6-month supply associated with a balanced market.

Housing Affordability Crisis Persists

• In Congressional testimony, NAR highlighted the dire lack of affordable housing inventory, with home prices rising 115% over the past decade while wage growth lagged at 38% as discussed in NAR Highlights Dire Lack of Housing Affordability and Inventory in Congressional Testimony.
• NAR called for policymakers to address zoning laws, building codes, labor force shortages, supply chain disruptions, and lending standards that are constraining new home construction needed to meet demand.

Landmark Real Estate Commission Settlement

• A federal judge preliminarily approved a $418 million settlement that will overhaul the way homebuyers find real estate representation and negotiate commissions as discussed in Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? – Forbes Advisor.
• The settlement centers on a lawsuit accusing the National Association of Realtors of violating federal antitrust laws. It mandates significant changes to the industry’s commission rules starting in July.

Mortgage Rates Remain Elevated, Impacting Affordability

• The average rate on a 30-year fixed mortgage rose to 6.39% this week, up from 6.27% last week, according to Freddie Mac as discussed in Home Sales and Starts Pull Back in March, While Economic Data Continue to Support Near-Term Growth | Fannie Mae.
• Higher borrowing costs have exacerbated the affordability crisis, sidelining many prospective buyers. Fannie Mae warns “These factors will keep mortgage rates at elevated levels for the near future.”

Despite the challenges, some experts see reasons for cautious optimism in the months ahead, predicting a gradual rise in inventory and slowing home price appreciation as more sellers list properties. However, affordability will likely remain a key concern for buyers until mortgage rates and home prices stabilize.