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n March 2025, the US housing market experienced a rare slowdown in home price growth and an increase in inventory during what's typically one of the most competitive months for buyers. Despite mortgage rates hitting their lowest point of the year, sales failed to keep pace with new listings, exacerbating affordability challenges.

    According to Zillow's latest report, over 375,000 homes were listed for sale in March, a nearly 9% increase from the same month in 2024. While this is still below pre-pandemic levels, it marks a steady rise in listing activity and aligns with seasonal trends.

    However, buyer demand faltered, with newly pending sales remaining flat compared to last year. Only about 265,000 listings went under contract, 110,000 fewer than the number of homes that entered the market. As a result, overall inventory climbed to 1.15 million homes, a 19% increase from last year and the highest level since 2020.

    The growing inventory, combined with cooled competition, led to a slowdown in home price growth. The typical home value rose just 0.2% month-over-month, the slowest growth for this time of year since at least 2018. Nationally, home values showed a modest 1.2% year-over-year increase.

    Affordability remains a significant issue for buyers, with the mortgage payment on a typical home requiring about 35.3% of median household income, even with a 20% down payment. Sellers adjusted their strategies in response to slower sales, with over 23% of listings receiving price cuts in March – the highest percentage for any March since at least 2018.

    Zillow's Chief Economist Skylar Olsen noted that first-time buyers are particularly vulnerable to affordability pressures and economic uncertainty. "Buyers, especially first-timers without equity to pour into their down payment, continue to struggle with affordability and now face even higher levels of uncertainty," Olsen said.