Housing Economy

Latest news in the housing economy

Latest News

  • Luxury home prices outpace rest of market

    Luxury home prices outpace rest of market

    Luxury home prices are rising faster than any other market, a recent report from Redfin explains. Year over year, the median U.S. luxury home sale price rose 4.7%.

    It’s a reasonable turn in the sector considering that many high-end homebuyers do not have the same affordability concerns or mortgage rate sensitivities. Therefore, the demand for luxury homes continues to rise.

    Pending sales of luxury homes gained 5.2% year over year, while pending sales for the rest of the market grew 3.6%.

    This is seen side by side in some markets, such as Tampa, where luxury home prices rose 15.6% year over year while all other homes actually saw a decrease of 0.5%.

    The influx of luxury buyers is extremely prominent in one major metro: the Bay Area. Pending sales for luxury homes in San Francisco climbed 45.9% year over year, largely attributed to the AI sector.

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  • AIA/Deltek ABI reports decline

    AIA/Deltek ABI reports decline

    The latest AIA/Deltek Architecture Billings Index® (ABI) reported a decrease from its April posting of 48.3, down to 44.5. This is the lowest level since the beginning of 2026. Signaling effects from general economic uncertainty in the past few months, despite cautious optimism earlier in the year.

    The South remains the strongest regional market at 49.6, with the Northeast (46.2), West (45.4) and Midwest (45.3) trailing a bit behind.

    “The uncertainty created by the Iran conflict, and substantially higher energy costs, weighed on architect billings in May,” said AIA Chief Economist, Richard Branch. “Higher interest rates, rapidly rising material costs and continued labor shortages all contributed to softer demand.”

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  • Takeaways from the current housing economy

    Takeaways from the current housing economy

    The Harvard Joint Center for Housing Studies released its annual State of the Nation’s Housing report, offering an overview of the current housing market. Many indicators show that housing market activity remained flat in early 2026. New home sales levels remained relatively unchanged, rental retention rates increased and new occupancies declined. Construction saw a slight decrease of 1% over the past year. Key takeaways from the report include subdued activity, weakening demand, and sidelined potential homebuyers.

    The current weakness in housing demand is a direct result of several underlying economic drivers and a decreasing employment growth rate.

    With many U.S. residents burdened by high housing costs, an increasing number of state and local governments are taking action to increase housing production.

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  • Cotality reports June U.S. home price insights

    Cotality reports June U.S. home price insights

    Cotality released the June 2026 U.S. home price insights. The report found that overall, the year-over-year home price increase remains relatively steady at 0.4%. However, the recent surge in mortgage rates has disrupted the spring homebuying season and reversed some of the affordability gains created by the lower rates seen throughout 2025.

    “Market strength suggests that some buyers remain insulated from mortgage-rate volatility and are supported by substantial home equity and stock market gains,” said Cotality Chief Economist Dr. Selma Hepp. “Meanwhile, markets that depend more heavily on traditional mortgage financing and rate-sensitive buyers are seeing prices stay relatively flat. Overall, fewer markets posted year-over-year price declines in April than in prior months, pointing to continued stabilization across the housing market.”

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  • Housing economist comments on core inflation report

    Housing economist comments on core inflation report

    The U.S. Bureau of Economic Analysis (BEA) released the April report for Personal Income and Outlays, outlining core inflation at 0.4% for the month and a 3.8%12-month inflation rate. This is an indication that on the next Fed decision on June 17, 2026 might continue March’s holding pattern.

    The BEA data does not relay one singular outcome for the housing market with a varying landscape across the U.S.

    “When inflation runs this hot, the Fed stays put and mortgage rates stay stuck in the mid-6s,” said Dr. Selma Hepp, Cotality‘s Chief Economist and regular contributor to Builder and Developer. “That freezes the national housing market in place. But a flat national number is hiding a lot behind the scenes. In fact, at a local level, many markets are hiding a complex landscape that is completely fractured from national numbers.”

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  • Home buying demand ticks up

    Home buying demand ticks up

    The housing market is showing signs of life; contract cancellations decreased in April 2026, indicating an uptick in homebuyers’ demand. Home-sale agreements were only down by -0.1 percentage points from March on a seasonally adjusted basis. This is tied with January for the lowest level of contract cancellations since September 2024, though the level has varied by less than half a percentage point over the last year and a half.

    Contract cancellations inched down this spring as homebuyers and sellers gained a clearer sense of housing-market conditions after several years of volatility. Additionally, the average 30-year fixed mortgage rate declined for three straight weeks in April, giving some buyers confidence in locking in a rate.

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  • Price drops become less common as market stabilizes

    Price drops become less common as market stabilizes

    According to a new analysis from Redfin, price cuts were slightly less common in April 2026, as the housing market showed signs of stabilization and rising homebuyer demand. More than 35.4% of U.S. home sellers cut their asking price in April 2026, down slightly from 35.6% a month earlier on a seasonally adjusted basis. This is significantly down from a record high of 36.6% in August 2025.

    The decreasing commonality of price cuts is helping sellers regain some negotiating power. Buyers are slowly returning as the job market improves, becoming a bit more confident in their earnings. While buyers are still outnumbered by sellers, they are slightly less so than before, indicating a shift towards a balanced housing market.

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  • Mortgage rates average 6.51%

    Mortgage rates average 6.51%

    On May 21, 2026, Freddie Mac released the results of its Primary Mortgage Market Survey, showing the 30-year fixed-rate mortgage (FRM) averaged 6.51%. This is up from last week, when it averaged 6.36%. In May 2025, the 30-year FRM averaged 6.86%.

    “The 30-year fixed-rate mortgage averaged 6.51% this week,” said Sam Khater, Freddie Mac’s Chief Economist. “As rates fluctuate, aspiring buyers should remember that by shopping around for the best mortgage rate and getting multiple quotes, they can potentially save thousands.”

    The 15-year FRM averaged 5.85%, up from last week when it averaged 5.71%. A year ago at this time, the 15-year FRM averaged 6.01%.

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  • Housing affordability increases in Q1 2026

    Housing affordability increases in Q1 2026

    Housing affordability conditions for first-time and entry-level buyers are improving at a reasonable pace. According to the National Association of Home Builders’ (NAHB) Wells Fargo Cost of Housing Index (CHI), in Q1 of 2026 the income share needed to buy a new home dropped 4% from Q2 2025.

    Despite mortgage rate changes and overall economic uncertainty, this exhibits promising signs for housing affordability for everyday Americans. The trend continues to existing homes, where income share needed to purchase dropped from 37% in Q2 2025 to 32% in Q1 2026.

    “The U.S. data for the percentage of earnings needed to purchase a new home in the first quarter is based on a national median new home price of $403,200 and median income of $106,800, said Rose Quint, assistant vice president for survey research at NAHB. “The first quarter median new home price is down slightly from $405,300 in the fourth quarter of 2025.”

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  • Pending home sales see 1.4% increase

    Pending home sales see 1.4% increase

    According to a report from the National Association of Realtors (NAR), the spring housing market saw a slight bump in activity in April, as pending home sales increased by 1.4% since March. Pending sales increased in the Northeast, Midwest and West, but declined in the South. Year-over-year pending home sales rose in the Midwest, South and West, but declined in the Northeast.

    The report, released on May 19, 2026, follows the release of data indicating that the National Association of Home Builders/Wells Fargo sentiment index notched a 3-point gain in May.

    “Buyers are coming out with cautious optimism despite increasing economic uncertainty and a slight rise in mortgage rates,” said NAR Chief Economist Lawrence Yun. “Demand will easily be even higher once mortgage rates retreat to the levels they were at earlier this year.”

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  • U.S. home prices rose 0.2% in April

    U.S. home prices rose 0.2% in April

    U.S. home prices rose 0.2% month over month in April on a seasonally adjusted basis and climbed 2.1% year over year. The Redfin Home Price Index, which uses the repeat-sales pricing method to calculate seasonally adjusted changes in single-family home prices, found that, overall, improving homebuyer demand could fuel further price gains in the coming months.

    “An improving labor market is buoying homebuyer demand, which is keeping home price growth afloat,” said Redfin Senior Economist Asad Khan. “Even though prices are rising, buyers still have bargaining power because they’re outnumbered by sellers. If housing demand keeps climbing, sellers may regain some of that power, causing home prices to rise further.”

    In Montgomery County, Pa., home prices climbed 2.5% month over month on a seasonally adjusted basis in April; the biggest increase among the U.S. metropolitan areas.

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  • Housing market shows signs of stabilization

    Housing market shows signs of stabilization

    According to a recent Redfin analysis, the housing market is beginning to show signs of stabilization. Approximately 35.4% of U.S. home sellers cut their asking price in April 2026 as an incentive to attract homebuyers. This marks a slight decrease from 35.6% in March and down from a record high of 36.6% in August 2025.

    Price cuts have become slightly less common due to the housing market beginning to stabilize. Homebuyer demand is rising, which is helping sellers regain negotiating power. In response to an improving job market, homebuyers are beginning to return. Although buyers are still slightly outnumbered by sellers, which prompted sellers to lean more into incentives, they are less so than before, indicating a shift in the power balance.

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  • Southern California Housing Market Forecast

    Southern California Housing Market Forecast

    According to the California Association of REALTORS, March 2026 showed fluctuating patterns for existing, single-family homes across the state. Across Southern California, there was a 3% increase in year-over-year home sales. The median home price saw a 0.3% increase year-over-year, reaching around $880,000 in March.

    While a modest gain, it indicates that prices are no longer skyrocketing or falling significantly. Overall, it is a sign of a market that is trying to find its equilibrium.

    Looking toward the rest of the year, prices are expected to continue their trend of modest, steady growth. If economic conditions continue to stabilize, inflation remains in check and if mortgage rates begin to ease consecutively, sales volume could see an uptick.

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  • Residential construction material prices are up

    Residential construction material prices are up

    According to the most recent Producer Price Index (PPI), input prices for residential construction rose in April. Various factors are raising costs around the U.S., but particularly for the residential market energy prices are at the forefront.

    The PPI for final demand rose 1.4% in April following a 0.7% increase in March. Excluding energy prices rising, building materials are also up 3.7% from a year ago. Apart from goods, services also saw a significant incline from a year ago.

    “Long-distance motor carrying service prices rose 10.4% in April and were 18.3% higher than a year ago, while local motor carrying service prices rose 1.4% in April and were 6.3% higher than a year ago,” said Jess Wade, economist and director of tax and trade policy analysis at the National Association of Homebuilders. “These are the two transportation services that are represented as inputs in the residential construction price index.

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  • Pending home sales climb to the highest level since 2023

    Pending home sales climb to the highest level since 2023

    In April, pending home sales hit the highest level since February 2023, rising 2% from the month before. This is the largest increase since March 2025. Existing home sales also climbed to a seasonally adjusted annual rate of 4.33 million, the highest level since February 2023.

    The median U.S. home sale price rose 2.4% year-over-year in April to $396,173, the biggest increase in 13 months, as house hunters came off the sidelines amid a stabilizing job market. The April jobs report showed an increase in hiring, which likely helped boost housing demand.

    “Homebuyer demand increased significantly at the end of March following a relatively quiet period in January and February,” said Dawn Kane, a Redfin Premier real estate agent working in both Maryland and Pennsylvania. “This is the first time post-pandemic I’ve felt the frenzy and comeback of a true spring market.”

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  • Home sales see an increase over two consecutive months

    Home sales see an increase over two consecutive months

    Sales of new U.S. single-family homes increased this year for two consecutive months, in February and March, just in time for the spring buying season. New home sales surged 7.4% to a seasonally adjusted annualized rate of 682,000 units in March. Sales ​increased to a rate of 635,000 units in February from 583,000 ​units in January, when they were weighed down by harsher weather conditions in the winter months.

    Despite the strong sales in March and February, new housing inventory remained high, indicating that the housing market remains in the homebuyer’s favor. With supply still elevated, the ​median new house price dropped 6.2% to $387,400 in March from a year earlier. Builders are continuing to offer incentives to attract homebuyers.

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  • Builders’ incentives prove successful, new home sales rise

    Builders’ incentives prove successful, new home sales rise

    New U.S. home sales increased in March after a slow start to the year. A main reason for the boost is the incentives offered by builders, according to Odeta Kushi, deputy chief economist at First American. Builders continued to adjust prices in March to attract homebuyers; a strategy that paid off. New single-family home sales were up 3.3% compared to a year ago and up 7.4% compared to February 2026.

    The median price for new homes sold in March was $387,400, down 6.2% compared to a year ago and down 5.3% from February.

    “Builders are adapting to the market — reducing prices, offering incentives and shifting to smaller homes — to meet buyers limited by affordability constraints,” said Kushi. “The housing market is showing some spring bounce, proving that demand is there, but only at the right price. Yet, that demand remains fragile and highly sensitive to affordability and economic uncertainty.”

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  • Cotality releases May 2026 home price insights

    Cotality releases May 2026 home price insights

    Cotality released its May 2026 U.S. home price insights report on May 5, 2026. Despite year-over-year price growth continuing to slow, the report noted that, looking ahead to March 2027, data suggests a broader market rebound. As recent trends have shown, if mortgage rates ease, pent-up demand will likely break loose, sparking positive activity in the housing market.

    Home values increased for the second straight month, with a slight 0.3% uptick from February to March. Cotality Chief Economist Selma Hepp said in her report that the national housing market is currently caught in a crosscurrent of pent-up demand and affordability challenges.

    “The housing market is currently stuck in a holding pattern,” said Hepp. “Although housing inventories have been on the rise in many markets, broad discounting is still rare, keeping prices high. In fact, asking prices of newly listed homes continue to trend more than 2% above closing prices, suggesting that very few sellers are budging on their expectations.”

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  • Freddie Mac releases April fixed-mortgage rates

    Freddie Mac releases April fixed-mortgage rates

    According to Freddie Mac, the 30-year fixed-rate mortgage rate (FRM) averaged 6.34% in April, 16 basis points (bps) higher than March. The average 15-year rate also increased by 13 bps to 5.69%. Despite the recent increases, both the FRM and average 15-year rates remain 39 bps and 21 bps lower than a year ago, respectively.

    Mortgage rates increased last month as ceasefire negotiations remain inconclusive. At its latest meeting, the Federal Reserve (Fed) held the federal funds rate unchanged at 3.5% to 3.75%, as inflation remains elevated alongside continued economic expansion. In other news, the Fed announced that Jerome Powell’s term as Chair will end next month and that he will remain on the Board of Governors.

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  • Rise in new home sales sparks life in housing market

    Rise in new home sales sparks life in housing market

    According to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built single-family homes rose 7.4% in March, to a seasonally adjusted annual rate of 682,000 units. The pace of new home sales is up 3.3% from 2025, marking a positive shift in housing market conditions.

    “An uptick in new home sales reflects improving demand conditions, supported by a modest pullback in mortgage rates and ongoing supply constraints in the existing home market,” said NAHB Chairman Bill Owens, a homebuilder and remodeler from Worthington, Ohio. “Builders are gradually increasing production, but elevated construction costs and labor shortages continue to limit the pace of expansion.”

    “Looking ahead, the rise in new home sales points to a modest strengthening in residential construction activity in the near term,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis.

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  • Housing’s share of the GDP falls below 16%

    Housing’s share of the GDP falls below 16%

    According to the most recent GDP estimates from the Bureau of Economic Analysis, Q1 of 2026 recorded housing’s share of the economy at 15.9%. This is reportedly the lowest share since 2019 and it is down .6% from a year ago. Residential Fixed Investment (RFI) was 3.7% of the economy, recording a $1.2 trillion seasonally adjusted annual pace. While the single-family RFI fell 8.2%, the multifamily RFI rose 1.9%.

    “Residential construction, measured by residential fixed investment, fell at its fastest pace in over three years, while household expenditures on housing services continued to remain steady,” said Jess Wade, economist and director of tax and trade policy analysis at the National Association of Homebuilders. “However, the housing share of GDP lagged during the post-Great Recession period due to underbuilding, particularly in the single-family sector.”

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  • Homebuilding shows signs of stabilization

    Homebuilding shows signs of stabilization

    Housing construction activity strengthened in March, with a notable rebound in both single-family and multifamily starts, signaling improved builder activity despite ongoing headwinds from financing costs and affordability constraints. According to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, overall housing starts increased 10.8% in March to a seasonally adjusted annual rate of 1.5 million units.

    While the monthly gain points to renewed momentum, year-to-date trends remain mixed, particularly in the single-family sector, while permit activity suggests some caution moving forward. Within the total, single-family starts increased 9.7% to a seasonally adjusted annual rate of 1.03 million units and are up 8.9% compared to March 2025.

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    Graph credit: NAHB

  • Rhode Island homebuilding gains momentum

    Rhode Island homebuilding gains momentum

    Rhode Island’s commitment to building new homes has gained traction over the last year. According to the latest integrated housing report released on April 15, 2026, by the state’s Executive Office of Housing, 3,778 building permits were issued across municipalities within Rhode Island in the last year, the highest level since the 1980s.

    “These numbers show consistent, meaningful progress year after year,” said Governor Dan McKee. “We’re seeing the results of our efforts with the General Assembly to work with cities and towns, remove barriers to development and make historic investments in housing.”

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  • Pending home sales report increase

    Pending home sales report increase

    According to the National Association of REALTORS (NAR), pending home sales increased by 1.5% in March, with the largest gains in the Northeast and South. The largest year-over-year increases are seen in the midwest in Kansas City, Miss. (14.9%) and Milwaukee–Waukesha, Wis. (13.5%). While the NAR reported a 1.1% year over year decrease in pending home sales, price cuts and regional job growth are a definitive factor where the market is moving.

    “Contract signings rose in March despite higher mortgage rates, pointing to pent-up housing demand,” said NAR Chief Economist Dr. Lawrence Yun. “A greater supply of inventory will help translate that demand into more home sales.”

    “Demand sensitivity to mortgage rates is greatest among first-time buyers, particularly younger buyers,” Yun said. “As a result, boosting supply and new-home construction should focus on smaller, more affordable homes.”

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  • As mortgage rates decrease, homebuyers jump in

    As mortgage rates decrease, homebuyers jump in

    Just in time for spring buying season, mortgage rates dropped for the third straight week, boosting demand from both homeowners and homebuyers. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.35% from 6.42%, with points falling to 0.61 from 0.62. Last year at this time, the 30-year fixed was 55 basis points higher.

    “Mortgage rates declined last week as financial markets responded positively to the Middle East ceasefire and the lower trend in oil prices,” said Mike Fratantoni, MBA senior vice president and chief economist. “Despite the geopolitical uncertainty, housing demand is being supported by a still resilient job market and homebuyers are experiencing a buyer’s market in most of the country, given the higher levels of inventory relative to last year.”

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  • AIA/Deltek ABI signals market stabilization

    AIA/Deltek ABI signals market stabilization

    Architecture firm billings held steady in March 2026, indicating market stability. The AIA/Deltek Architecture Billings Index (ABI) scored 49.8, reflecting near-equal shares of firms reporting increases and decreases. This marks the closest the index has come to the 50-point growth threshold since early 2023, offering cautious optimism.

    New project inquiries rose steadily and firm backlogs averaged 6.6 months, the highest since December 2023.

    “While billings could soon see positive growth for the first time in three years, ongoing economic and geopolitical challenges, such as the Iran conflict and labor shortages, pose significant risks to recovery,” said AIA Chief Economist, Richard Branch. “These external issues will have a significant impact on the health of construction activity in both the near and long term.”

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  • John Burns releases first quarter recap

    John Burns releases first quarter recap

    On April 17, 2026, John Burns Research & Consulting (JBREC) released its recap of the first quarter, from housing bills to looking ahead towards the rest of the year’s outlook.

    Each quarter, the company partners with Kiavi to survey approximately 400 to 500 fix-and-flip investors nationwide on market conditions, investor sentiment and their near-term outlook. JBREC expects fix-and-flip activity to grow in 2026, driven by three key factors: Price stabilization, lower financing costs and new tax deductions for renovation expenses.

    The organization expressed concern for the proposed 21st Century ROAD to Housing Act, which aims to make housing more affordable, but includes provisions that could make housing more expensive.

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