Housing Is Quietly Drawing the Fed a Roadmap

• There were 1.4 million existing homes for sale in March.

• The number of days on the market is the highest in a decade.

• The median sales price declined over 4% from June’s peak.

For all the noise around inflation and Fed succession drama, the real story is unfolding in housing…

The opening stretch of this year has pushed homebuyers’ patience to the limit. With oil prices jumping and the Consumer Price Index (“CPI”) running away from the Federal Reserve’s 2% target, policymakers aren’t budging. They’re still uneasy about the pace of inflation, and they want last year’s rate cuts to work their way through the system. Historically, that takes six to eight months. From our central bank’s perspective, time is on their side—and they plan to use it.

What muddies the outlook is what’s around the corner. Jerome Powell is scheduled to retire at the end of May, and replacement nominee Kevin Warsh’s vetting process appears dead in the water. Complicating matters, the law offers no clean playbook for how a transition, or lack of, should unfold. Wall Street is left guessing who will be steering the ship. Layer in the ongoing conflict in Iran, and the uncertainty only deepens.

Meanwhile, while markets fixate on the Fed’s next move, they’re overlooking a signal hiding in plain sight: housing demand has downshifted. Redfin reported that homes sat on the market for an average of 55 days in March—longer than 2025’s 49 days and the slowest turnover since 2016, when the average was 64. That’s not noise; it’s a meaningful cooling.

The National Association of Realtors (“NAR”) echoed the same message earlier this week. Existing home sales slipped to an annualized pace of 4 million in March, the weakest since June 2025 and still hovering near the bottom of a multi‑year range. At the same time, inventory has climbed back toward pre‑pandemic levels. More supply paired with softer demand is putting downward pressure on prices. And lower home prices feed directly into slower inflation—potentially giving the Fed more room to ease later this year. That easing cushion is one of the quiet forces that should help support a steady S&P 500 rally as 2026 unfolds.

But don’t take my word for it, let’s look at what the data is telling us…

Each month, NAR publishes its housing indicators. Existing home sales account for 85–90% of total volume, making them the cleanest read on market health. In March, months’ supply—a measure of how long it would take to sell all listed homes—held at 4.3. That’s in line with February and among the highest readings of the past decade. And remember: supply should be tightening as we move into spring. Instead, it’s holding firm. That’s not what a hot market looks like...

NAR’s time‑on‑market data mirrors Redfin’s. Properties lingered for 57 days in March, up nearly 8% from a year earlier. Buyers aren’t rushing; they’re pacing themselves.

Prices are telling the same story. Realtor.com reports the median listing price per square foot was $225 in March, down 3% year‑over‑year. That’s the seventh straight month of annualized declines. We haven’t seen a streak like that since mid‑2023. Translation: sellers are losing leverage.

Sale prices echo the trend. NAR shows the median price of an existing home sold in March was just under $409,000, up 1.4% from last year. But that’s weaker than typical seasonality going back to 2018. It also marks the twelfth straight month of annualized growth at 2% or less—a stretch we last saw in mid‑2023. Put simply, the housing market hasn’t looked this soft since the Fed was still hiking…

Bottom line: inventory is behaving exactly as it does in a soft market—it’s capping prices. A shaky job market and a Fed on hold are keeping would‑be buyers on the sidelines. And with most homeowners far more inclined to refinance than relocate, sales could stay sluggish for a while.

Housing carries real weight in the inflation calculus. It accounts for roughly 35% of CPI and about 17% of the Personal Consumption Expenditures (“PCE”) index. When home prices cool, rental pricing power tends to follow. That pulls down owners’ equivalent rent, one of the most influential components in both CPI and PCE.

Elevated supply should keep that pressure moving in the right direction, helping tame inflation over the coming year and improving the odds of additional rate cuts. That easing cushion remains a quiet but meaningful tailwind for a steady S&P 500 rally as the year progresses.

Five Stories Moving the Market:

President Donald Trump struck an optimistic tone for prospects that the U.S. and Iran could clinch a permanent ceasefire as the two sides discuss an extended truce ahead of its expiration next week; Trump said it increasingly looks like the two sides will strike a “good” deal – Bloomberg. (Why you should care -

Iranian leaders now face a towering postwar reconstruction challenge that is putting pressure on them to negotiate for sanctions relief, even though they have portrayed the current cease-fire as a victory against an overwhelming U.S. and Israeli onslaught – WSJ. (Why you should care – the bombing campaign has destroyed factories needed to rebuild infrastructure, likely hastening the need to secure a deal)

U.S. crude cargo prices have retreated from recent price spikes ​while prices in Europe and Asia continued to hit record highs almost seven weeks into the Iran war, ‌as releases from the U.S. Strategic Petroleum Reserve and Venezuelan imports cushion domestic supplies – Reuters. (Why you should care – the divergence should help to keep a lid on U.S. inflation growth)

Investors’ expectations of Bank of England policy changes have moved into closer alignment with the likely path of interest rates, according to Monetary Policy Committee Member Alan Taylor; Governor Andrew Bailey agreed with the sentiment saying investors’ expectations had gotten ahead of themselves – WSJ. (Why you should care – the Bank of England is unlikely to raise interest rates at the upcoming meeting on April 30)

Netflix gave a forecast for the second quarter that fell short of analysts’ expectations; in the current quarter Netflix forecast earnings per share of 78 cents, less than the 84 cents predicted by Wall Street – Bloomberg. (Why you should care – co-founder Reed Hastings will step down from the board to pursue philanthropy and personal interests)

Economic Calendar:

Spring Meetings of the World Bank and International Monetary Fund 

Earnings: ALLY, FITB, RF, STT, TFC

Eurozone – Exports, imports for February (5 a.m.)

Fed’s Daly (San Francisco, Non‑voter) Speaks (11:30 a.m.)

Fed’s Barkin (Richmond, Non‑voter) Speaks (12:15 p.m.)

U.S. - Baker Hughes Rig Count (1 p.m.)

Fed’s Waller (Board Member, Voter) Speaks (2 p.m.)

U.S. - CFTC’s Commitment of Traders Report (3:30 p.m.)

Fed Releases Balance Sheet Updates on Commercial Banks (4:15 p.m.)