US Housing & Mortgage Markets
The US housing market is grinding through a historic stalemate: sales near 30-year lows, inventory above pre-pandemic norms, and mortgage rates climbing again — this time on geopolitical pressure rather than Fed action.
SALES & INVENTORY: A Market in Suspension
McBride's mid-April overview lands a stark headline: 2026 existing home sales are running at roughly 2025 pace — the lowest since 1995. That's not a rounding error; it's a structural freeze. The dominant mechanism remains the rate lock-in effect: owners with sub-4% mortgages have little incentive to sell into a 7%+ environment, suppressing both supply coming to market and the turnover that normally drives volume.
Months-of-supply has now climbed above pre-pandemic levels — a threshold worth watching carefully. This isn't the inventory famine of 2021–2023. Supply is rebuilding, just not from the sellers you'd expect; it's accumulating because demand isn't absorbing it.
PRICES: Deceleration Without Collapse
The Case-Shiller data through January tells a nuanced story. The National Index rose just 0.9% year-over-year — a sharp deceleration from the double-digit prints of recent years. The Composite 10 fared better at +1.7% YoY, the Composite 20 at +1.2% YoY, suggesting that dense, supply-constrained metros are still holding up relative to the broader market.
The monthly data offers a mixed signal: +0.23% month-over-month (seasonally adjusted), the 6th consecutive MoM gain after 5 straight monthly declines. That's a modest stabilization, not a rebound — and McBride is explicit that the Case-Shiller series carries a significant lag (the January print averages closings from November through January, with some contracts signed in September).
McBride's judgment on downside risk is direct: prices are under pressure, especially in high-inventory markets, but a cascading bust is not in the forecast. The structural buffer is homeowner equity — most sellers can afford to wait or simply won't sell at a loss. Distressed inventory, the accelerant behind 2008–2012, is not present.
MORTGAGE RATES & DEMAND: The Rebound That Wasn't
Perhaps the most telling dynamic McBride flags: lower rates in late 2025 and early 2026 generated a pickup in purchase mortgage applications — but that didn't translate into higher sales. Buyers appear to be window-shopping, not closing. Affordability may have improved at the margin, but not enough to overcome payment shock for move-up buyers or the psychological friction of trading a locked-in rate.
Now rates are moving the wrong direction again. McBride attributes the recent rate rise to geopolitical factors ("the war"), and the consequence is already visible: purchase applications are now down year-over-year. The brief demand window appears to have closed.
Closing Synthesis
The mid-April 2026 housing picture is one of slow-motion pressure, not acute distress. Inventory is rising, sales are near generational lows, and price appreciation has nearly flatlined nationally — with regional divergence growing. The market's stability rests on a foundation of homeowner equity and locked-in low rates, but that same foundation is what's keeping transactions frozen. Until rates fall meaningfully and durably, or affordability is restored through price correction, volume is unlikely to recover. The geopolitical rate shock adds a new variable that could extend the stalemate further into 2026.
TL;DR - Sales collapse, extended: 2026 existing home sales are pacing at 2025 levels — the lowest since 1995 — with no near-term catalyst for recovery. - Prices decelerating, not collapsing: Case-Shiller national YoY is down to +0.9%, with pressure concentrated in high-inventory markets; widespread distress is not McBride's base case. - Demand false start: The late-2025 rate dip sparked purchase application activity but failed to lift actual closings; rates are now back up on geopolitical pressure, and apps are negative YoY again. - Inventory inflection: Months-of-supply has crossed above pre-pandemic norms — a key threshold that shifts pricing power incrementally toward buyers in affected markets.
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- Bill McBride (1)