Housing Economy

Latest news in the housing economy

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  • Federal Reserve holds rates steady for fifth consecutive month

    Federal Reserve holds rates steady for fifth consecutive month

    The Federal Reserve, during its July policy meeting, decided to hold interest rates at 3.5% to 3.75%. This comes amid elevated inflation rates, which were attributed to supply shocks. This is also the Fed’s fifth consecutive hold; the last rate cut was in December 2025.

    “The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve’s dual mandate,” the Board said in a statement. “The Committee is continuing its policy of maintaining ample reserves in the banking system.”

    This is Federal Reserve Chairman Kevin Warsh’s second decision of his tenure since he took the helm in May. The National Association of Home Builders Chief Economist, Robert Dietz, discussed what this means for builders.

    “If you squint a little, this can be seen as a dovish policy message because, while the Fed can affect aggregate demand by tightening monetary policy (as the bond market appears to expect), the central bank cannot effectively address supply shocks with policy,” said Dietz. “While this should not be interpreted as taking rate hikes off the table, it is an accurate statement of current macroeconomic conditions and many analysts’ views that the Fed cannot solve energy price increases due to war or one-off tariff effects with monetary policy.

  • New home sales edge higher

    New home sales edge higher

    According to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, newly built single-family home sales rose 1.6% in June to a seasonally adjusted annual rate of 628,000.

    “New home sales are gaining some momentum at the more affordable range of the market, with homes priced below $300,000 accounting for 23% of June sales, up from 16% a year earlier,” said the National Association of Home Builders (NAHB) Chief Economist Robert Dietz. “However, that price point is generally only achievable in markets with lower development and construction costs, particularly with respect to lower state and local regulatory costs.”

    “The pace of new home sales has remained constrained in recent months by elevated mortgage rates,” said Bill Owens, chairman of the National Association of Home Builders (NAHB) and a home builder and remodeler from Worthington, Ohio. “Builders continue to use incentives to support sales, with NAHB survey data showing that 62% of builders offered some form of incentive in June.”

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  • New single-family homes shift to smaller lots

    New single-family homes shift to smaller lots

    The long-term trend of building single-family detached homes on smaller lots appears to have stabilized. According to an analysis from the National Association of Home Builders, new single-family detached homes have steadily shifted toward smaller lots as a direct result of builders’ efforts to improve affordability and attract homebuyers.

    According to the latest Survey of Construction, the share of new homes built on smaller lots remained near record highs in 2025, following more than a decade of steadily shrinking lot sizes.

    The share of small lots remained high in 2025, with close to two-thirds of new single-family detached homes sold occupying lots under 9,000 square feet. Moreover, 38% of lots were under 7,000 square feet. These shares are just slightly below the record highs established over the last two years.

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  • Home building employment concentrated in rural markets

    Home building employment concentrated in rural markets

    According to the National Association of Home Builders’ Home Building Geography Index (HBGI), residential construction is playing a larger role in rural and suburban markets. Among the seven HBGI categories, non-metro/micro counties recorded the highest concentration of residential construction employment.

    NAHB’s analysis of county-level data shows that the industry’s employment footprint is particularly large in rural and smaller-market counties, where home building accounts for a greater share of total employment than it does nationally. Large metro core counties are showing relatively lower employment concentration due to their more diversified economies, which are less dependent on home building activity.

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  • How homebuilding shaped 250 years of U.S. history

    How homebuilding shaped 250 years of U.S. history

    As we celebrate the 250th anniversary of the founding of the United States, one of the most pivotal aspects of the American Dream is homeownership and the homebuilding behind it.

    From the first president’s estate, Mount Vernon, to America’s first planned city, Savannah, Georgia, the history of homebuilding is woven into the fabric of the country.

    Since first studied by the U.S. Census, the homeownership rate in the U.S. in 1965 was 62.9%. There have been periodic increases and dips, while it currently sits at 65.3 in Q1 2026.

    Construction of housing rose to its peak in 2005 with over 2 million housing starts. The National Association of REALTORS estimates the country lacks 4.7 million homes.

    The future landscape of housing production is positive, with a landmark housing bill passed by both the House and the Senate.

    “NAHB applauds lawmakers for working together in a bipartisan, bicameral effort to pass historic housing legislation that will deliver real benefits for the American people,” said Bill Owens, chairman of the National Association of Home Builders. “The 21st Century ROAD to Housing Act will help increase the nation’s housing supply by reducing regulatory barriers and encouraging local governments to reform zoning and land-use policies that have limited home building. By expanding homeownership and rental housing opportunities nationwide, this legislation will help ease the housing affordability crisis.”

    People behind the homebuilding industry play a key part in this country’s founding ideals.

    A celebration of the country’s 250 years of history includes homebuilding.

     

  • Utah makes strides to speed up housing development

    Utah makes strides to speed up housing development

    Leaders in Utah’s government are taking action to address the housing supply and, more importantly, a streamlined process for building new homes. Inside the Governor’s Office of Economic Development, a new Division of Housing and Community Development was formed by the Utah Legislature earlier in the year. At the helm of the new division is the Governor’s senior housing adviser, Steve Waldrip.

    “Housing is foundational to opportunity. If young families, teachers, first responders and the people who keep our economy running can’t afford to live in the communities they serve, our long-term prosperity is at risk,” said Governor Spencer Cox. “This new division will help us better align state resources, local partnerships and private-sector innovation so we can build more homes, strengthen our neighborhoods and keep the Utah dream within reach for the next generation.”

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  • 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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  • May 2026 Luxury Housing Market Report

    May 2026 Luxury Housing Market Report

    Luxury home prices across the U.S. reached $1,283,432 in May 2026, despite year-over-year declines continuing at -1.4%. The pace of annual softening has pulled back considerably from the 5%-plus drops seen in early 2025, suggesting an uptick in the national luxury housing market.

    Among tracked luxury metros, Minneapolis and Boise City, Idaho, have fully surpassed their pandemic-era peaks as of February, at 5% and 4.2%, respectively. The composition of the top 10 luxury markets was unchanged from April, with the same 10 appearing in slightly different order.

    Year over year, Naples-Marco Island, Fla., at 4.3%, and Crestview-Fort Walton Beach-Destin, Fla., at 3.2%, were the only markets on the list with positive annual price growth.

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  • June 2026 Housing Market Forecast

    June 2026 Housing Market Forecast

    The National Association of REALTORS released an analysis forecasting the housing market dynamics in June, including sales, inventory and buying trends. The analysis cited various factors, called seasonality trends, that influence the housing market and compared the current market conditions to previous seasonality trends to predict the June 2026 housing forecast.

    The analysis found that existing-home sales typically rise by 8.2% during the month, reaching their highest level of the year on average. The beginning of the summer marks a distinct shift in the housing market, characterized by the end of the school year for most localities, additional daylight and consistently warm weather. These conditions provide more flexibility for potential buyers to view a wider range of open listings.

    June usually sees an average increase of 0.8% in housing inventory, presenting specific advantages for sellers, including the optimal moving conditions previously mentioned, if they plan to buy and the high prices associated with the season.

    Historically, the average home spends about 30 days on the market in June, representing the fastest turnover in the year, alongside May. The favorable weather conditions drive prospective buyers to spend more time viewing homes, resulting in more frequent offers and decreasing the days spent on the market.

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  • Less young adults are first-time homebuyers

    Less young adults are first-time homebuyers

    According to a report from First American, young adults are the missing gap in first-time homebuyers. Nearly half of 20-to 24-year-olds still lived with their parents in 2025. Only about 25% of 25-to 29-year-olds owned their homes.

    The reality is that homeownership is arriving later in life for young adults, with the delay often originating at moving out of their childhood homes.

    Young adults are moving through traditional markers of adulthood, such as moving out, work, marriage and children, on a different timeline than previous generations. As those milestones shift, the housing sequence that often follows,  moving out, renting and buying, also shifts.

    Most young adults are still renting. While today’s renters are likely to become tomorrow’s buyer, that “tomorrow” is happening later in life. The reasons for this vary between affordability challenges, as well as other life milestones that have shifted into the later years, such as school, work or family.

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  • Average homebuyer’s down payment decreases

    Average homebuyer’s down payment decreases

    According to a new Redfin analysis, the average homebuyer’s down payment is down from last year, falling to $64,000 in March 2026, down 1.5% year-over-year. The average down payment was 15%, down from 16.1% in 2025.

    Down payment percentages were highest in three California metros: San Jose, San Francisco and Anaheim, all at 25% each.

    Down payments were lowest in Virginia Beach at 2% and Detroit at 5%, which are both considered affordable markets.

    The data in the report is from an analysis of county records across 40 of the most populous U.S. metropolitan areas. March 2026 is the most recent month for which data is available.

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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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  • 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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  • New York’s housing plan delivers record-breaking progress

    New York’s housing plan delivers record-breaking progress

    On May 5, 2026, New York Governor Kathy Hochul announced record-breaking progress toward the state’s five-year housing goal, with more than 22,000 affordable homes created or preserved during Fiscal Year 2025-26. This marks the highest single-year production for Hochul’s five-year housing plan.

    New York State Homes and Community Renewal has financed the creation or preservation of more than 81,000 affordable homes over the first four years of the housing plan, putting the state on track to meet its goal of 100,000 affordable homes ahead of schedule.

    “New York is tackling the housing crisis head-on by building more homes, faster and making our state more affordable for families,” said Hochul. “This record-setting year complements my Let Them Build initiative and shows what’s possible when we combine smart policy with strong investment. We’re going to keep pushing forward to ensure that every New Yorker has access to a safe, affordable place to live.”

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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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