U.S. Housing Market Slows as Sales Drop and Mortgage Rates Rise

U.S. home sales have continued to weaken in 2026. New single‑family homes fell 7.3% in May, the lowest level since January, while the seasonally‑adjusted annual rate slipped to 580,000 units. Mortgage rates have risen above 6%, with the 30‑year fixed averaging 6.47% after a 50‑basis‑point increase since the war‑related shock earlier in the year. Buyers cite high rates and prices as the top barriers, and 71% say they are waiting for rates and prices to fall.

Inventory remains tight but is slowly improving. National home‑price growth slowed to 0.9% year‑over‑year in January, and the median new‑home price stayed near $425,000. Illinois saw a 1.5% decline in May sales and a 6.3% rise in median price to $335,000, while the Chicago metro area posted a similar dip with prices up 5.5%.

The vacation‑home segment collapsed, with U.S. second‑home mortgage originations down 65.8% since 2021; New York fell 59.4%. In contrast, Bend, Oregon posted a 15.6% year‑over‑year increase in home sales, though national activity remains sluggish.

Data from Zillow and ATTOM warn of mounting headwinds: slower buyer traffic, longer time on market and more price concessions. A bipartisan housing bill aimed at curbing Wall Street investment in single‑family homes and easing construction reviews was left unsigned by the president, leaving the affordability gap unaddressed.