Summary
This report examines the current state of the U.S. housing market, highlighting the challenges posed by elevated interest rates and economic uncertainty. Home sales are reported to be over 20% below pre-pandemic levels, primarily due to the 30-year fixed mortgage rate, which currently stands at 6.2%. The document outlines the dual impact of these rates: they increase the cost of entry for new homebuyers and discourage existing homeowners from listing their properties. The report anticipates a gradual recovery in the housing sector, with home sales expected to rise by 5% in 2026 and another 10% in 2027, although these figures still reflect a 5% decline compared to 2019 levels. It further details the divergence between existing and new home sales, noting that the resale market has seen a decline while new home sales have remained more stable. Factors such as the mortgage lock-in effect and economic uncertainty are identified as ongoing barriers to market recovery.
