The Housing Market: Not a Collapse, Not a Recovery

Recent housing data calls to light the sluggishness of the housing market. Existing home sales, as reported by the National Association of Realtors, were little changed in 2025 relative to 2024.

When we look at trends in rates-of-change, we can see that existing home sales were flashing green for much of 2025, but momentum waned at the end of the year. This highlights a key consideration when operating in this market: conditions are not deteriorating as sharply as some headlines may suggest, but they are also not meaningfully rebounding. In other words, the market appears stuck in a holding pattern rather than transitioning into a clear recovery phase.

Pending home sales data, also from the National Association of Realtors, tells a similar story. After peaking during the COVID-era boom in 2021, activity has fallen significantly and remains roughly 25% below the long-term average dating back to 2007. Similar to existing home sales, pending home sales fail to show sustained upward momentum as we head into 2026. Meanwhile, single-family housing starts are mired in a declining trend as poor foot traffic numbers, competition from rising single-family existing homes, a glut of new homes still under construction, and economic uncertainty all weigh on starts activity.

Mortgage rates play an important role in this dynamic. After climbing above 7% in late 2023, the 30-year US mortgage rate has eased, generally trending around 6.0%–6.3% in late 2025 and into early 2026. While this modest easing can support some renewed buyer interest, rates at these levels are likely to continue to constrain many potential homeowners and dampen broader market activity, especially when coupled with elevated prices and rising, but still low, single family existing home inventory levels.

For firms, especially those tied to housing, construction, and housing-related consumer durables, this environment has real implications. Planning assumptions should avoid both overly pessimistic and overly optimistic scenarios relative to the current status quo. A slow housing market tends to constrain transaction volumes, constrain growth opportunities, and heighten competition, putting pressure on margins and cost structures. Firms that focus on operational efficiency, flexible staffing, and targeted investment — rather than betting on a rapid housing rebound — are likely to be best positioned as the market continues to grind sideways.