Mixed Results From March Home Sales

Home sales showed mixed results for new and existing properties in March, while the Federal Reserve's latest Beige Book highlights how trade policy uncertainty is affecting businesses nationwide. Read on for these updates and more.

·      Existing Home Sales Fall Below Forecasts

·      New Home Sales Climb in March

·      “Pervasive” Uncertainty Clouds Economic Outlook, Fed Report Shows

·      Jobless Claims Show Business Caution

Existing Home Sales Fall Below Expectations

March existing home closings disappointed, dropping 5.9% from February – nearly double the forecasted 3% decline. All regions saw decreases, with the West experiencing the largest drop, partly due to California wildfires delaying closings. These figures likely reflect transactions started in January and February when mortgage rates were higher.

What’s the bottom line? While inventory increased to 1.33 million units (up 8.1% month-over-month and 19.8% year-over-year), context is crucial. Current inventory levels remain near 30-year lows, significantly below pre-pandemic figures and almost 3 million units less than during the housing bubble period. This persistent supply shortage, combined with pent-up buyer demand, is a good sign for continued home price appreciation.

New Home Sales Climb in March

New home contracts increased for the second consecutive month in March, rising 7.4% from February. This growth exceeded market forecasts, fueled primarily by strong contract activity in the Southern region. Year-over-year sales showed a 6% increase.

While the median home price fell 1.9% to $403,600 from February, this doesn't indicate declining home values nationwide. Rather, the median price – representing the middle point of all homes sold – shifted due to more sales occurring in the South's relatively less expensive market, even as home prices continue rising across the country.

What’s the bottom line? While limited existing home inventory has redirected some buyers to new construction, supply still lags buyer interest. Of the 503,000 new homes available at the end of March, only 119,000 were completed, with the remainder either under construction or not yet started.

“Pervasive” Uncertainty Clouds Economic Outlook, Fed Report Shows

The Fed's latest Beige Book indicates economic activity has remained stable since the previous report, but uncertainty about international trade policy is "pervasive" across all regions.

Key findings include strong auto sales as consumers purchased ahead of tariffs, while non-auto spending declined. Both domestic and international tourism dropped, potentially signaling trouble for the travel sector. Many businesses are delaying hiring decisions due to tariff concerns. Economic decline reports doubled from two to four districts since the last assessment. Price increases were widespread, with businesses expecting tariff-driven cost increases.

What’s the bottom line? The Beige Book, published eight times yearly before Federal Open Market Committee meetings, offers qualitative insights from all 12 Federal Reserve districts. This report – the first reflecting recently implemented broad tariffs – mentioned tariffs 107 times (more than double the previous report), highlighting how trade uncertainty dominates economic concerns.

Jobless Claims Show Business Caution

Weekly initial jobless claims edged up by 6,000 to 222,000, though they remain at historically low levels. Meanwhile, continuing unemployment claims dropped by 37,000 to 1.841 million.

What’s the bottom line? While new unemployment filings have stayed relatively low lately, continuing claims have consistently exceeded 1.8 million since last June. This suggests unemployed workers are taking longer to find new positions and companies are hiring more slowly, as businesses maintain a cautious "wait and see" approach amid economic uncertainty and tariff concerns.