Two reports released on July 16, 2026, highlight the ongoing struggles in the housing market, primarily driven by affordability issues. The National Association of Realtors (NAR) reported a 5.4% decline in pending home sales for June compared to May, with sales also down 0.3% year-over-year, falling short of analysts' expectations.
NAR Chief Economist Lawrence Yun attributed this downturn to the highest mortgage rates in nearly a year and record-high median home prices, making it particularly difficult for first-time buyers. The average rate for a 30-year fixed mortgage remained stable at 6.6% throughout June, a significant increase from earlier in the year.
Additionally, mortgage applications for home purchases decreased by 2% compared to the same week last year, indicating weakening demand. Concurrently, the National Association of Home Builders (NAHB) reported a drop in builder sentiment to 34 in July, remaining below the neutral mark of 50 for over 15 months, the longest stretch since 2012.
NAHB Chief Economist Robert Dietz noted that high mortgage rates, expensive land, rising material costs, and labor shortages are major hurdles for the industry. A growing number of builders are responding by cutting prices and offering sales incentives, with 37% reducing prices in July.
Although new housing legislation aims to alleviate some of these issues by streamlining permitting processes, more comprehensive policy changes are necessary at local and state levels. Overall, the persistent high prices and low supply of housing continue to exert upward pressure on the market, contributing to a challenging economic landscape