Homebuyers Venture Back into Market Despite Broader Economic Gloom

Entering the year, the National Association of Realtors peered into its crystal ball and projected US home sales would rise 14% in 2026. JPMorgan said housing prices would flatline, a boon for potential buyers. Analysts at brokerage Redfin predicted 2026 would mark the start of a “Great Housing Reset,” a “yearslong period of gradual increases in home sales and normalization of prices as affordability gradually improves.”

Yeeeeaaaah … about that. As Bankrate analysts noted last week, home sales fell year over year in the first three months of 2026 and flatlined in April, while home prices keep setting new records. Tuesday, mercifully, brought promise: One leading indicator of future sales suggests “buyers are coming out with cautious optimism.”

A Housing Market Divided

NAR announced that pending home sales rose 1.4% in April from the previous month and 3.2% year over year. The figure refers to home sale contracts that were signed, but not yet closed, which is why it’s considered an important indicator of future home sales. It looks especially promising for some regions. How’s the Northeast? Wicked good, contracts rocketed up 6.6%. And they’re good in the Midwest? You betcha, contracts rose 3%. Do you like affordability? You will love Cleveland.

That can’t be said for the South, where pending sales fell 0.7%. Real estate markets like Miami, Nashville, Austin and Las Vegas, white hot during the pandemic when people from more expensive places moved their newly remote lives into the sunshine, have flipped into buyers’ markets, with the sellers outnumbering buyers by more than two to one. But hot or cold, no market has removed one of the biggest barriers facing potential homeowners. The 30-year fixed mortgage rate, at 6.36%, remains near two-decade highs. NAR Chief Economist Lawrence Yun said pending sales rose despite that and “increasing economic uncertainty,” and predicted better days when things do change:

• “Demand will easily be even higher once mortgage rates retreat to the levels they were at earlier this year,” Yun said. On the other hand, given the inflation risks of the Iran war, experts don’t see the Federal Reserve cutting interest rates in the immediate future to help make that happen. 
• At the same time, Yun warned about the US homeownership rate, which is hovering around a six-year low at 65% and expected to fall this year: “Unless supply meaningfully increases, home price growth could outpace wage growth.” 

Through the Roof: According to a MoneyLion report released Tuesday, there are seven US housing markets where the median home sale price is more than $100,000 over the average home value. They are Santa Maria, Salinas, and San Luis Obispo in California; Crestview, Naples and Cape Coral in Florida; and Daphne, Alabama. That’s right: Daphne, Alabama. Maybe people just love eating hardhead catfish at Jubilee?