Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

HOME SALES TURN SOUTH AS WARTIME BORROWING COSTS CLIMB

Investors embarked on a new week faced with a re-escalation of the Iran war after peace talks failed. They were also treated to their first glimpse at home sales since the war began on February 28.

Sales of pre-owned U.S. homes USEHS=ECI decreased by 3.6% last month to 3.98 million units at a seasonally adjusted annual rate (SAAR), according to the National Association of Realtors (NAR).

That's the lowest level since June of last year, and 2% below the 4.06 million units SAAR analysts were looking for. On the other hand, it follows February's upwardly revised 2.7% growth.

In detail, single-family home sales - which represented about 91% of the total - dropped by 3.5%. The volatile condo/co-op segment retreated by 5.4%, extending the prior month's 2.6% drop.

NAR shows a 3.0% monthly increase in homes on the market. At March's decelerated sales pace, it would take 4.1 months to sell every home on the market, up from 3.8 months in February.

The decrease occurs against a backdrop of rising borrowing costs. The average 30-year fixed contract rate currently sits at 6.51%, having jumped 42 basis points since the onset of the war on Iran, according to the Mortgage Bankers Association.

"Lower consumer confidence and softer job growth continue to hold back buyers," writes Lawrence Yun, NAR's chief economist. "Mortgage rates have been rising, and that has led us to trim our home sales outlook for the year."

NAR slashed its 2026 home sales growth estimate to 4% from 14%.

"We don’t see much upside for sales over the next several months," said Nancy Vanden Houten, lead economist at Oxford Economics. "Given the backup in mortgage rates since the start of the war with Iran, we expect home sales to move sideways before starting to gradually rise at the end of the year."

While NAR's existing home sales report harkens back to March, housing stocks reflect where investors expect the sector to be six months to a year in the future.

While housing-related indexes - the S&P 1500 Homebuilding Index .SPCOMHOME and the PHLX Housing Index .HGX - handily outperformed the broader market in the first two months of the year, that advantage evaporated in March when the war on Iran pushed interest rates higher, taking mortgage rates with them.

Year-to-date, the SPCOMHOME and the HGX are now off 2.2% and 1.5%, respectively. During that time, the S&P 500 .SPX has dipped 0.4%.

(Stephen Culp)

*****

EARLIER ON LIVE MARKETS:

RETAIL COMPANIES SET FOR TARIFF REFUND WINDFALL CLICK HERE

US STOCKS MIXED EARLY AS IRAN TALKS FAIL, US BEGINS BLOCKADE CLICK HERE

CHIP STOCK RALLY FACES TEST AS US-IRAN TALKS FAIL TO DELIVER DEAL CLICK HERE

UK HOMEBUILDERS LOOK CHEAP AFTER WAR-DRIVEN SELLOFF - MORNINGSTAR CLICK HERE

EVEN IF WAR ESCALATES, THIS ISN'T THE 1970'S CLICK HERE

TIME TO PAY ATTENTION TO THE UZBEKISTAN'S SUM? CLICK HERE

EUROPEAN STOCKS NOT TOO FAZED BY IRAN TALKS FAILURE CLICK HERE

BEFORE THE BELL: EUROPEAN SHARES SET FOR OPENING FALL CLICK HERE

MORNING BID EUROPE: OIL SURGES ON US BLOCKADE OF IRAN CLICK HERE