US Housing & Mortgage Markets
The US housing market is grinding along the bottom of its cycle: sales are essentially flat year-over-year, price appreciation has nearly evaporated, and Zillow just cut its forecasts — again. Elevated mortgage rates, driven by persistent inflation, are doing most of the damage.
SALES: FLAT IS THE NEW UP
March existing home sales came in at 3.98 million SAAR, down 3.6% from February and down 1.0% year-over-year on a seasonally adjusted basis. McBride flags an important footnote: the raw, non-seasonally-adjusted count was actually up 2.4% YoY in his local market tracker — a calendar artifact, since March 2026 had 22 working days vs. 21 in March 2025. The headline SA number is the honest signal here, and it's negative.
Zillow's Olsen sees no meaningful recovery on the horizon. Her team's latest sales forecast for full-year 2026 is 3.73 million — just +0.5% annually — a sharp downward revision from last month's call of +3.4% growth. (The NAR-methodology version of Zillow's forecast is slightly higher at 4.13 million, +1.6% YoY, but the direction of revision is the same.) The culprit is explicit: upward revisions to mortgage rate expectations driven by persistent inflation, which Olsen expects to keep borrowing costs elevated and buyer demand suppressed for the balance of the year.
The longer view is sobering. McBride notes that sales in most tracked markets remain down sharply compared to March 2019 — a reminder that this isn't just a rate-cycle hangover but a structural volume problem.
INVENTORY: GROWING, BUT NOT ENOUGH AND NOT EVENLY
Active inventory in McBride's local market composite was up 2.8% year-over-year in March — an improvement, but decelerating from February's +4.4% YoY pace. New listings were down 1.2% YoY, a slight improvement from February's -1.5%, but still negative. Supply is trickling in, not flooding.
The regional picture matters here. McBride emphasizes "significant regional differences" in both inventory levels and the comparison to 2019 baselines. The national aggregate obscures markets where inventory remains critically tight alongside others that have normalized or even loosened. The lock-in effect (sellers reluctant to give up sub-4% mortgages) continues to suppress new listings unevenly across geographies.
PRICES AND AFFORDABILITY: THE REVISION CYCLE CONTINUES
Zillow's home value forecast for 2026 is now +0.3% — essentially flat — revised down from last month's projection. Olsen's framing is telling: expectations for stronger inventory growth relative to sales are the weight on appreciation. When supply rises faster than demand, price pressure dissipates. That's the dynamic now.
Affordability remains structurally impaired. Elevated mortgage rates aren't expected to ease meaningfully given the inflation backdrop, which keeps monthly payment burdens high even as price growth stalls. For prospective buyers, flat prices don't help much if financing costs stay where they are.
RENTAL MARKET: SUPPLY HOLDS THE LID
Zillow projects single-family rent growth of +2% YoY and multifamily at +1% YoY by December 2026. Olsen points to a confluence of supply-side pressures keeping rents in check: elevated vacancy rates, continued multifamily deliveries still working through the pipeline, and — notably — for-sale homes shifting into the rental market, adding competitive supply from an unexpected direction. The net effect is that renters retain negotiating leverage, and rent growth should stay well below the inflation peaks of 2022–23.
SYNTHESIS
Two analysts, one story: the housing market is stuck. Sales volumes are historically depressed, price appreciation has been revised toward zero, and mortgage rates — tethered to an inflation outlook that won't quit — remain the primary constraint on demand. Inventory is technically improving year-over-year, but new listings are still negative and the regional dispersion means national numbers paper over genuinely different local realities. There's no catalyst for a breakout visible in this data.
TL;DR - Sales are flat-to-down at 3.98M SAAR in March, and Zillow cut its full-year sales forecast to just +0.5% growth amid persistent rate pressure. - Inventory is growing slowly (+2.8% YoY active listings) but new listings remain negative (-1.2% YoY) and most markets are still well below 2019 levels. - Price appreciation has nearly vanished — Zillow's revised 2026 home value forecast is just +0.3%, as supply growth outpaces demand. - Rents are soft, with multifamily at just +1% YoY as new supply, vacancies, and converted for-sale homes keep a lid on landlord pricing power.
Compiled from 2 sources · 2 items
- Bill McBride (1)
- Skylar Olsen (1)