The U.S. real estate market got off to a lackluster start to this year's spring selling season, with U.S. existing home sales in March posting the largest monthly decline in more than two years.

According to the National Association of Realtors on Thursday, existing home sales in the U.S. fell 5.9% from February.

According to the National Association of Realtors on Thursday, existing home sales fell 5.9% from February, to a seasonally adjusted annualized rate of 4.02 million units.

According to the National Association of Realtors on Thursday. <All U.S. regions saw a month-over-month drop in sales, but the decline was steeper in the West, the nation's most expensive region, where the drop amounted to more than 9%. However, this was the only region to post a year-over-year rise in sales, buoyed by strong activity in the Rocky Mountain states, which are benefiting from strong labor market growth.

<These statistics are based on closings, meaning the contracts for these sales were entered into in January and February, during a period when the average interest rate on 30-year fixed-rate mortgages was above 7%. It wasn't until Feb. 20 that rates began to fall below that level, according to Mortgage News Daily data.

Mortgage News Daily.

The decline in sales comes despite a marked increase in the supply of homes. At the end of March, the number of homes for sale totaled 1.33 million units, up nearly 20% from March of last year. At the current sales pace, this inventory only covers a four-month period, while a balanced market between supply and demand requires a six-month inventory.

<The high inventory and sluggish demand have put the brakes on prices, with the average sales price of existing homes in March reaching $403.7k, the highest level ever recorded for the month. However, annualized price growth was limited to just 2.7% from March 2024, marking the slowest pace of increase since last August, amid a gradual decline that began in December.