March 2026 housing market forecast: Key factors impacting home buyers and sellers this month

Core Insights - The housing market is experiencing a gradual improvement in affordability, with a notable increase of over $30,000 in affordability compared to the previous year, allowing median-income households to afford homes priced at $331,483, the highest since March 2022 [4][6]. Group 1: Mortgage Rates and Affordability - Mortgage rates have fallen to levels not seen since September 2022, with current rates for 30-year fixed mortgages as low as 5.5%, down from over 7% a year ago [6][7]. - The stabilization of mortgage rates near 6% is seen as a turning point, potentially encouraging homeowners who have been hesitant to re-enter the market [7]. Group 2: Home Price Trends - Home price growth is moderating, with the S&P Cotality Case-Shiller Index indicating the lowest appreciation since the recovery post-Great Recession, with growth falling to just 1.3% in 2025 after a peak of 19% in 2021 [8][9]. - Nearly two-thirds of home buyers in 2025 received discounts off the list price, with an average price cut of 7.9%, the largest since 2012 [9][10]. Group 3: Housing Supply and Inventory - As of February 2025, there was a 5.1-month supply of homes for sale, indicating a balanced market, but new construction has not kept pace with demand, resulting in a widening home supply gap of over 4 million homes [11][12]. - New listings have decreased by 2.8% year-over-year, totaling 80,595 [13]. Group 4: Market Dynamics - The median days on the market for homes has increased to 67 days, the longest duration in nearly seven years, indicating a shift in market dynamics [14]. - It is becoming incrementally easier to qualify for a mortgage, as indicated by the Mortgage Bankers Association's credit availability index, which has been generally increasing since November 2023 [15][16].