The spring season is viewed as the U.S. housing market’s most active period.Current trends are unfavorable for the housing market. Although thousands of new homes were listed in March this year, along with price cuts and other perks for buyers, sales remain flat.
Highlights
- More than 375,000 new homes were listed on the U.S. housing market amid price cuts.
- Inventory levels have also increased by 19%, the highest since the pandemic.
- Although builders have been bringing changes in favor of new homeowners, U.S. customers are not making purchases as expected.
Housing Market Struggles Despite Favorable Changes for Buyers
Zillow Group research highlights that over 375,000 new houses were listed on the market in March. With this, there was a 9% increase in new home listings as compared to March 2024.
Plus, the average mortgage rate in the country last month was also a little lower than that seen in 2024. Price cuts also achieved their highest point since 2018.
All these steps were taken in consideration of the effects of tariffs on buyers and uncertainties regarding the fluctuating U.S. market. However, there was no progress in the newly pending sales.
Inventory Levels Reach a New High
With a rise of 19% from 2024, the inventory levels touched the figure of 1.15 million homes last month. According to Zillow, this is the maximum inventory for U.S. buyers ever in March since the pandemic.
Another striking part is that the current inventory in the U.S. housing space is about 24% lower than the averages of 2018 and 2019 during the spring season.
Supply is Outpacing Demand in the U.S. Housing Space
The supply of new homes is outpacing the demand from buyers in most U.S. locations. This is particularly seen in hot Sun Belt metros, which have been witness to in-migration and frequent homebuilding activities since 2020.
This is further evidenced during the period from mid-March to mid-April, when the median home sale price was low compared to 2024. Florida and Texas were among the 10 of the 50 most populated U.S. metro areas that saw the price decline.
Additionally, the sitting period for homes has also extended this year to about 47 days in March. According to Redfin, this is the slowest home-buying pace since the pandemic broke.
A Struggling Spring Season for the U.S. Home Market
Although sellers have brought inventive strategies, including price cuts and higher home inventory sitting periods, the current struggling spring period cannot be negated.
With a 3.2% dip from February and an 11.5% decline from a year ago, only 650,355 new homes were sold in the U.S. housing space.
Against this backdrop, another notable aspect is that 32% of U.S. builders implemented price cuts in March. Additionally, 53% of them kept the prices as they were last year. Only 15% increased their rates in March 2025. Builders have been compelled to bring changes in their prices due to the pressures of the new immigration and tariff policies.
Why Are People Not Opting to Buy New Properties?
Industry experts have cited new tariff rates, inflation troubles, and potential recession threats as reasons that are barring buyers from making a house purchase. Some have also stated climate-related events like the Los Angeles wildfires as reasons that have reduced the demand for housing in the U.S.
Sellers and builders across the country are taking steps that favor new home buyers. However, the efforts will result in increased demand for homes only if broader concerns related to new tariffs, inflation, environmental factors, and recession fears are addressed.
