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Going into the year, the National Association of Realtors looked into its crystal ball and projected that U.S. home sales would rise 14% in 2026. JPMorgan said home prices would stabilize, a boon for potential buyers. Analysts at brokerage Redfin predicted that 2026 would usher in a “Great Housing Reset,” a “year-long period of gradual increases in home sales and normalization of prices as affordability gradually improves.”
Yeahaaaah… about that. As Bankrate analysts noted last week, home sales fell year-over-year in the first three months of 2026 and stabilized in April, while home prices continue to set new records. Tuesday, fortunately, was promising: A leading indicator of future sales suggests that “buyers are coming out with cautious optimism.”
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A divided real estate market
NAR announced that pending home sales increased 1.4% in April from the previous month and 3.2% year over year. The figure refers to home purchase and sale contracts that have been signed but not yet closed, so it is considered an important indicator of future home sales. It looks especially promising for some regions. How’s the northeast? Very good, contracts shot up 6.6%. And are they good in the Midwest? You can bet contracts were up 3%. Do you like affordability? You’ll love Cleveland.
The same cannot be said for the South, where pending sales fell 0.7%. Real estate markets like Miami, Nashville, Austin and Las Vegas, red-hot during the pandemic as people from more expensive places moved their new remote lives into the sun, have become buyers’ markets, with sellers outnumbering buyers by more than two to one. But, hot or cold, no market has eliminated 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 “growing economic uncertainty,” and predicted better days when things turn around:
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“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 inflationary risks of the Iran war, experts don’t see the Federal Reserve cutting interest rates anytime soon to help make that happen.
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At the same time, Yun warned about the U.S. homeownership rate, which is hovering at a six-year low of 65% and expected to fall this year: “Unless supply increases significantly, home price growth could outpace wage growth.”
Through the roof: According to a MoneyLion report released Tuesday, there are seven U.S. housing markets where the median home sale price is more than $100,000 higher than the median home value. They are Santa María, Salinas and San Luis Obispo in California; Crestview, Naples and Cape Coral in Florida; and Daphne, Alabama. That’s right: Daphne, Alabama. Maybe people love to eat hard catfish at Jubilee?
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