{"id":81198,"date":"2026-06-03T13:27:03","date_gmt":"2026-06-03T20:27:03","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=81198"},"modified":"2026-06-03T14:33:14","modified_gmt":"2026-06-03T21:33:14","slug":"what-happened-in-the-housing-market-no-escape-velocity","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2026\/06\/03\/what-happened-in-the-housing-market-no-escape-velocity\/","title":{"rendered":"What Happened In the Housing Market &#8211; No Escape Velocity"},"content":{"rendered":"\n<h2 id=\"housing-market-intro-and-summary\" class=\"wp-block-heading\"><strong>Housing Market Intro and Summary<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Across builder stocks, construction activity, permits, new home sales, and existing home sales, the same pattern persists: the housing market has yet to achieve the escape velocity needed to break free from its multiyear ranges. A month ago, the housing market and related stocks looked like they were<a href=\"https:\/\/drduru.com\/onetwentytwo\/2026\/05\/08\/what-happened-in-the-housing-market-clinging-to-a-cliff\/\"> clinging to a cliff of bad news<\/a>. Little has changed since then even with the passage of historic legislation to make homes more available and affordable in America.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here is a summary for May&#8217;s housing market update:<\/p>\n\n\n\n<div class=\"wp-block-group has-background\" style=\"background-color:#e9f3ff\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n<ul class=\"wp-block-list\">\n<li>The housing market showed no escape from its multiyear trading ranges as housing starts, permits, and new home sales remained constrained despite modest improvements in builder sentiment.<\/li>\n\n\n\n<li>Homebuilder stocks continued to significantly underperform the broader market, with the iShares US Home Construction ETF (ITB) failing to break out of its bear market and struggling below key technical resistance.<\/li>\n\n\n\n<li>Builder confidence improved in May as all major Housing Market Index components increased, suggesting stabilization but not a sustained recovery.<\/li>\n\n\n\n<li>New home sales declined in April, while permits remained near three-year lows, indicating limited momentum for future construction activity.<\/li>\n\n\n\n<li>Existing home sales posted only a marginal gain despite improved affordability metrics.<\/li>\n\n\n\n<li>California housing activity strengthened in April, supported by higher end demand.<\/li>\n\n\n\n<li>The historic 21st Century ROAD to Housing Act advanced efforts to increase housing supply and affordability.<\/li>\n\n\n\n<li>Rising mortgage rates in May threatened to reverse recent affordability improvements and hold out the prospect of no escape from the current malaise.<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h2 id=\"housing-stocks\" class=\"wp-block-heading\"><strong>Housing Stocks<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The iShares US Home Construction ETF (ITB) failed to breakout of its bear market despite a sharp rally in late April. A sell-off in the first half of May took the ETF of home builders down to levels last seen in March, 2025. The passage of a Federal housing affordability bill (more details in the &#8220;home closing thoughts&#8221; section) revived interest in builders just in time to prevent a major multi-year breakdown. Still, the upside for ITB looks very limited as long as interest rates remain elevated with no prospects of rate cuts anywhere in sight. Home builders have insufficient momentum to reach &#8220;escape velocity&#8221; to sustain an end to the ongoing bear market. The current struggle at resistance from the 50-day moving average (DMA) (the red line) is telling.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_ITB-iShares-US-Home-Construction-ETF.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1510\" height=\"920\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_ITB-iShares-US-Home-Construction-ETF.png\" alt=\"The iShares US Home Construction ETF (ITB) continues to struggle in an extended trading range dating back to 2023 and a bear market dating back to early 2025.\" class=\"wp-image-81612\" title=\"iShares US Home Construction ETF (ITB)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_ITB-iShares-US-Home-Construction-ETF.png 1510w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_ITB-iShares-US-Home-Construction-ETF-768x468.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_ITB-iShares-US-Home-Construction-ETF-1320x804.png 1320w\" sizes=\"auto, (max-width: 1510px) 100vw, 1510px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>The iShares US Home Construction ETF (ITB) continues to struggle in an extended trading range dating back to 2023 and a bear market dating back to early 2025.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\"> ITB&#8217;s under-performance versus the S&amp;P 500 has become quite extreme, reaching levels last seen in the early weeks of the COVID-19 pandemic.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_SPYvsITB.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1227\" height=\"541\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_SPYvsITB.png\" alt=\"The ratio of the S&amp;P 500 (SPY) over the iShares U.S Home Construction ETF (ITB) has reached heights rarely seen in the last 10 years.\" class=\"wp-image-81614\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_SPYvsITB.png 1227w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_SPYvsITB-768x339.png 768w\" sizes=\"auto, (max-width: 1227px) 100vw, 1227px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>The ratio of the S&amp;P 500 (SPY) over the iShares U.S Home Construction ETF (ITB) has reached heights rarely seen in the last 10 years.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">While trading in the stocks of home builders looks bleak, a burst of good news came in the form of another acquisition. <a href=\"https:\/\/seekingalpha.com\/news\/4598717-berkshire-hathaway-to-acquire-taylor-morrison-in-8_5b-deal\">Berkshire Hathaway (BRK.A) (BRK.B) purchased Taylor Morrison Home (TMHC) for $72.50 in cash<\/a>. I am quite surprised given TMHC is selling out during a time builders are priced near or at recession-like valuations, and the company has\/had big ambitions as one of the nation&#8217;s largest builders. Moreover, the offer price stops short of bringing TMHC back to its all-time high set in late 2024.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_TMHC-Taylor-Morrison-Home-Corporation.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1510\" height=\"920\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_TMHC-Taylor-Morrison-Home-Corporation.png\" alt=\"Taylor Morrison Home Corporation (TMHC) gained 22.3% on the acquisition news but stopped short of its all-time high.\" class=\"wp-image-81615\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_TMHC-Taylor-Morrison-Home-Corporation.png 1510w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_TMHC-Taylor-Morrison-Home-Corporation-768x468.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_TMHC-Taylor-Morrison-Home-Corporation-1320x804.png 1320w\" sizes=\"auto, (max-width: 1510px) 100vw, 1510px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>Taylor Morrison Home Corporation (TMHC) gained 22.3% on the acquisition news but stopped short of its all-time high.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">Fortunately, <a href=\"https:\/\/seekingalpha.com\/article\/4875181?gt=f343b6139261e2fb\">I kept my large position in TMHC as part of the last seasonal trading on homebuilders<\/a>. So while I brought <a href=\"https:\/\/drduru.com\/onetwentytwo\/2025\/01\/01\/how-home-builder-stocks-trade-in-a-seasonal-pattern-2025-update\/\">the seasonal trade<\/a> to an end back in March, TMHC became one of my most successful trades since I started this strategy over 10 years ago. I took profits the same day of the announcement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This acquisition and the on-going structural issues in the industry mean that the seasonal trade&#8217;s relevance has greatly declined. The trend for home builders is toward consolidation. Thus, I am transitioning to becoming a &#8220;value&#8221; buyer no matter the season. For example, after seeing builders barely respond to the acquisition, I still bought shares in D.R. Horton (DHI). This builder is a natural first target given BRK purchased shares in DHI last year. Since the news was released on August 15, 2025, the shares have traded mostly lower. I will continue to buy alongside BRK. <\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_DHI-DR-Horton.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1510\" height=\"920\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_DHI-DR-Horton.png\" alt=\"D.R. Horton, Inc (DHI) has been stuck in a trading range despite a significant purchase by Berkshire Hathaway last summer.\" class=\"wp-image-81617\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_DHI-DR-Horton.png 1510w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_DHI-DR-Horton-768x468.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_DHI-DR-Horton-1320x804.png 1320w\" sizes=\"auto, (max-width: 1510px) 100vw, 1510px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>D.R. Horton, Inc (DHI) has been stuck in a trading range despite a significant purchase by Berkshire Hathaway last summer.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/drduru.com\/onetwentytwo\/subscribe-free\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:#0693e3\" class=\"has-inline-color has-white-color\">Click to Join the One-Twenty Two Mailing List for Free<\/mark><\/a><\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h2 id=\"housing-data\" class=\"wp-block-heading\"><strong>Housing Data<\/strong><\/h2>\n\n\n\n<h3 id=\"hmi\" class=\"wp-block-heading\"><strong><a href=\"https:\/\/eyeonhousing.org\/2026\/05\/builder-sentiment-posts-gain-in-may-but-significant-affordability-challenges-persist\/\" target=\"_blank\" rel=\"noreferrer noopener\">Home Builder Confidence: The Housing Market Index<\/a> &#8211; May, 2026<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The National Association of Home Builders (NAHB)\/Wells Fargo Housing Market Index (HMI) increased 3 points from 34 in April to 37 in May. The NAHB undersold the jump by calling the gain &#8220;modest&#8221; and choosing to emphasize economic uncertainty and affordability issues.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">All three of the major HMI indices posted gains in May. The &#8220;Single-Family: Present&#8221; component rose 3 points to 40. The &#8220;Single-Family: Next Six Months&#8221;, a measure of expectations for future sales, increased 3 points to 45. The &#8220;Traffic of Prospective Buyers&#8221; posted a 3-point gain to 25. Thus across the board builders improved their perspective and outlooks on the market.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Housing-Market-Index-HMI-and-University-of-Michigan-Index-of-Consumer-Sentiment.png\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"371\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Housing-Market-Index-HMI-and-University-of-Michigan-Index-of-Consumer-Sentiment.png\" alt=\"Housing Market Index (HMI) and University of Michigan Index of Consumer Sentiment\" class=\"wp-image-81578\" style=\"aspect-ratio:1.6139630390143738;width:779px;height:auto\" title=\"The National Association of Home Builders (NAHB)\/Wells Fargo Housing Market Index (HMI) and the University of Michigan Index of Consumer Sentiment\"\/><\/a><figcaption class=\"wp-element-caption\"><strong><em>Housing Market Index (HMI) and University of Michigan Index of Consumer Sentiment<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><em><strong>Source for data: <a href=\"https:\/\/www.nahb.org\/News-and-Economics\/Housing-Economics\/Indices\/Housing-Market-Index\" target=\"_blank\" rel=\"noreferrer noopener\">NAHB<\/a> and <a href=\"https:\/\/data.sca.isr.umich.edu\/tables.php\" target=\"_blank\" rel=\"noreferrer noopener\">the University of Michigan<\/a><\/strong><\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the May consumer sentiment data remains pending, the rebound in builder sentiment suggests consumer sentiment could soon bottom.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Housing-Market-Index-HMI-Components-and-University-of-Michigan-Index-of-Consumer-Sentiment.png\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"371\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Housing-Market-Index-HMI-Components-and-University-of-Michigan-Index-of-Consumer-Sentiment.png\" alt=\"Housing Market Index (HMI) Components and University of Michigan Index of Consumer Sentiment\" class=\"wp-image-81579\" style=\"aspect-ratio:1.619718309859155;width:805px;height:auto\"\/><\/a><figcaption class=\"wp-element-caption\"><strong><em>Housing Market Index (HMI) Components and University of Michigan Index of Consumer Sentiment<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">The dynamics of price incentives were mixed in May. The share of builders cutting prices decreased from 36% in April to 32% in May. The average price reduction increased to 6% from 5%. The use of sales incentives was 61% in May, up from 60% in April, and extending the streak at or above 60% to 14 straight months.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Each region made gains in May. The Northeast region jumped to its second highest level of the year, going from 39 to 44. The Midwest tied its high for the year set at 45 in March, completing a large swing from 39 as the low of the year set in April. The South has been relatively stable for the year. The region increased from 34, its low of the year, to 36, its high of the year. The West continued its regional underperformance with its HMI gaining one point from its low of the year at 26. The West started 2026 at 34 and has trended downward since then.<\/p>\n\n\n\n<h3 id=\"new-residential-construction-single-family-housing-starts\" class=\"wp-block-heading\"><strong><a href=\"https:\/\/www.census.gov\/construction\/nrc\/pdf\/newresconst_202604.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">New Residential Construction (Single-Family Housing Starts)<\/a> &#8211; April, 2026<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Single-family housing starts declined in April but have a good chance to quickly recover the 1M mark given the jump in builder sentiment in May. April&#8217;s 930K in single-family starts represents a 9.0% month-over-month decrease and a 2.4% year-over-year decrease.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/eyeonhousing.org\/2026\/05\/single-family-starts-fall-amid-economic-uncertainty-and-affordability-pressures\">The NAHB blamed the declines on<\/a> &#8220;continued economic uncertainty and affordability challenges, including higher construction costs, ongoing labor shortages and elevated financing expenses.&#8221;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Housing-Starts-April-2026.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1320\" height=\"465\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Housing-Starts-April-2026.png\" alt=\"US. Bureau of the Census, Privately Owned Housing Starts: 1-Unit Structures [HOUST1F], first retrieved from FRED, Federal Reserve Bank of St. Louis, June 2, 2026\" class=\"wp-image-81581\" title=\"Housing starts\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Housing-Starts-April-2026.png 1320w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Housing-Starts-April-2026-768x271.png 768w\" sizes=\"auto, (max-width: 1320px) 100vw, 1320px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>US. Bureau of the Census, Privately Owned Housing Starts: 1-Unit Structures [HOUST1F], <a href=\"https:\/\/fred.stlouisfed.org\/graph\/?g=19ihv#\">first retrieved from FRED<\/a>, Federal Reserve Bank of St. Louis, June 2, 2026<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">While builders decreased the pace of starts, permits are still around 3-year lows. <a href=\"https:\/\/fred.stlouisfed.org\/series\/PERMIT1\">Building permits<\/a> (new privately-owned housing units authorized in permit-issuing places)&nbsp;have stalled out since June, 2025. Permits were 881K, a 1.5% month-over-month decrease from March and a 4.6% year-over-year decline. The sluggish activity in permits suggests starts will remain rangebound for quite some time to come.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Starts were mixed across regions. Month-over-month the changes were +16.1%, -18.8%, -2.7%, and -22.9% for the Northeast, Midwest, South, and West respectively. Year-over-year the changes were -3.2%, -33.3%, +1.7%, and +7.3% for the Northeast, Midwest, South, and West respectively.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><a href=\"https:\/\/www.census.gov\/construction\/nrs\/pdf\/newressales_202604.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">New Residential Sales (Single-Family)<\/a> &#8211; April, 2026<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">New home sales declined in April. Sales fell 6.2% from March&#8217;s sales figure of 663K to 622K in April. Year-over-year sales declined 11.3%. The margin of error on the sequential change is once again particularly large. At \u00b112.8% the decline could easily disappear or even reverse in future revisions. Note that March sales were revised downward 2.9%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the <a href=\"https:\/\/eyeonhousing.org\/2026\/05\/new-home-sales-rise-supported-by-limited-existing-inventory\/\" target=\"_blank\" rel=\"noreferrer noopener\">NAHB attributed March&#8217;s increase in sales<\/a> to greater inventory availability at the lower end of the market. The organization <a href=\"https:\/\/eyeonhousing.org\/2026\/05\/new-home-sales-down-in-april-on-affordability-concerns\/\" target=\"_blank\" rel=\"noreferrer noopener\">blamed April&#8217;s decline<\/a> on &#8220;elevated mortgage rates, higher inflation and economic uncertainty kept more buyers on the sidelines in April as ongoing affordability challenges continue.&#8221; Overall, just like starts, new home sales are simply stuck in an extended multiyear range.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_New-home-sales-April-2026.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1320\" height=\"465\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_New-home-sales-April-2026.png\" alt=\"US. Bureau of the Census, New One Family Houses Sold: United States [HSN1F], first retrieved from FRED, Federal Reserve Bank of St. Louis, June 2, 2026\" class=\"wp-image-81585\" style=\"width:840px;height:auto\" title=\"new home sales\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_New-home-sales-April-2026.png 1320w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_New-home-sales-April-2026-768x271.png 768w\" sizes=\"auto, (max-width: 1320px) 100vw, 1320px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>US. Bureau of the Census, New One Family Houses Sold: United States [HSN1F], <a href=\"https:\/\/fred.stlouisfed.org\/graph\/?g=19iju#\">first retrieved from FRED<\/a>, Federal Reserve Bank of St. Louis, June 2, 2026<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">For April, <a href=\"https:\/\/fred.stlouisfed.org\/graph\/?g=1hL9L\" target=\"_blank\" rel=\"noreferrer noopener\">the median price<\/a> for new homes increased 8.0% sequentially and increased 2.2% year-over-year to $422,500. As is often the case, the increase in prices coincided with a shift in the sales mix.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sales of homes priced over $1M remained at 6% of sales. The two lowest tiers declined from 52% to 45% of sales. The $500,000 to $599,999 tier increased from 18% to 22% of sales.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">March&#8217;s inventory was 8.7 months of sales. April&#8217;s inventory increased to 9.4 months of sales compared to 8.6 months a year ago. Absolute inventory increased from 481K to 489K. Note well that &#8220;greater inventory availability&#8221; did not help sales this month.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Northeast, Midwest, South, and the West changed -12.9%, -21.4%, -14.7%, +4.6% respectively year-over-year. Sequentially, the Northeast, Midwest, South, and the West changed -12.9%, -25.0%, -9.8%, +18.7% respectively. The wide swings and variety in regional changes continue to align with the high degree of uncertainty in the aggregate estimate.<\/p>\n\n\n\n<h3 id=\"existing-home-sales-march-2026\" class=\"wp-block-heading\"><strong><a href=\"https:\/\/www.nar.realtor\/newsroom\/nar-existing-home-sales-report-shows-0-2-increase-in-april\" target=\"_blank\" rel=\"noreferrer noopener\">Existing Home Sales<\/a> &#8211; April, 2026<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Existing home sales increased slightly in April. The National Association of Realtors (NAR) reported a 0.2% month-over-month increase to 4.02M, alongside flat sales year-over-year.<\/p>\n\n\n<div class=\"wp-block-image is-style-default\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Existing-home-sales-April-2026.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1320\" height=\"465\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Existing-home-sales-April-2026.png\" alt=\"Existing home sales tepidly lifted from March's low level.\" class=\"wp-image-81595\" title=\"existing home sales\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Existing-home-sales-April-2026.png 1320w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260602_Existing-home-sales-April-2026-768x271.png 768w\" sizes=\"auto, (max-width: 1320px) 100vw, 1320px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>Existing home sales tepidly lifted from March&#8217;s low level.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"has-text-align-center wp-block-paragraph\">(For historical data from 1999 to 2014, <a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/08\/140820_ExistingHomeSales.png\" target=\"_blank\" rel=\"noreferrer noopener\">click here<\/a>. For historical data from 2014 to 2018, <a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2018\/04\/180401_ExistingHomeSales.png\" target=\"_blank\" rel=\"noreferrer noopener\">click here<\/a>) <strong>Source for chart: National Association of Realtors, Existing Home Sales\u00a9 [EXHOSLUSM495S], <a href=\"https:\/\/fred.stlouisfed.org\/series\/EXHOSLUSM495S\/\" target=\"_blank\" rel=\"noreferrer noopener\">retrieved from FRED, Federal Reserve Bank of St. Louis<\/a>, June 2, 2026<\/strong><br><\/p>\n\n\n<div class=\"wp-block-image is-style-default\">\n<figure class=\"aligncenter size-large\"><a href=\"https:\/\/i0.wp.com\/eyeonhousing.org\/wp-content\/uploads\/2025\/11\/Exising_1-scaled.jpg\" target=\"_blank\" rel=\" noreferrer noopener\"><img decoding=\"async\" src=\"https:\/\/i0.wp.com\/eyeonhousing.org\/wp-content\/uploads\/2026\/05\/Exising_1-scaled.jpg\" alt=\"\" title=\"existing home sales since 1999\"\/><\/a><figcaption class=\"wp-element-caption\"><strong><em>Source: <\/em><\/strong><a href=\"https:\/\/eyeonhousing.org\/2026\/05\/existing-home-sales-edged-up-slightly-in-april\/\" target=\"_blank\" rel=\"noreferrer noopener\"><em><strong>National Association of Home Builders<\/strong><\/em><\/a><strong><em> (the NAHB&#8217;s record of the NAR existing homes data &#8211; data back to 1999 available in the addendum at the end of the post)<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">The organization credited improved affordability for the tiny incremental gain. Although there was no gain from a year ago, the NAR reported year-over-year changes for its Housing Affordability Index. At an aggregate level, the index improved from 101.4 to 110.6. Each region also experienced healthy gains in year-over-year affordability: Northeast +4.7%, Midwest +5.9%, South +9.6%, West +12.5%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Total housing inventory in April was 1.47M units, up 5.8% from March and up 1.4% from April 2025. The NAR reported a 4.4-month supply of unsold inventory, up from 4.2 months last month and up from 4.3 months one year ago. As usual, inventory gains did not prevent price appreciation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/fred.stlouisfed.org\/series\/HOSMEDUSM052N\" target=\"_blank\" rel=\"noreferrer noopener\">The median sales price of an existing home<\/a> was $417,700 in April, up 0.9% from one year ago ($414,000). April marked the 34th consecutive month of year-over-year price increases. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The REALTORS\u00ae Confidence Index showed a median time on market of 32 days in April, down from 41 days in March and up from 29 days in April 2025.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The NAR also reported that first-time homebuyers represented 33% of sales (up from 32% in March and down from 34% one year ago).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Regional sales changes were mixed, an unsurprising configuration given the slight gain in aggregate sales. Month-over-month sales were unchanged in the Northeast, increased 2.2% in the Midwest, increased 0.5% in the South, and declined 2.6% in the West. The regional year-over-year changes were: Northeast -8.2%, Midwest -1.0%, South +2.7%, West unchanged.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/fred.stlouisfed.org\/series\/EXSFHSUSM495S\" target=\"_blank\" rel=\"noreferrer noopener\">Single-family existing home sales<\/a> were unchanged month-over-month in April at a seasonally adjusted annual rate of 3.64M and declined 0.3% year-over-year. The median price of a single-family home was $422,300, an increase of 1.0% from last year.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><a href=\"https:\/\/www.car.org\/aboutus\/mediacenter\/newsreleases\/2026releases\/april2026sales\" target=\"_blank\" rel=\"noreferrer noopener\">California Existing Single-Family Home<\/a> <a href=\"https:\/\/www.car.org\/aboutus\/mediacenter\/newsreleases\/2025releases\/oct2025sales\" target=\"_blank\" rel=\"noreferrer noopener\"><\/a><a href=\"https:\/\/www.car.org\/aboutus\/mediacenter\/newsreleases\/2025releases\/sept2025sales\" target=\"_blank\" rel=\"noreferrer noopener\">Sales<\/a> \u2013 April, 2026<\/strong><\/h3>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a href=\"https:\/\/www.car.org\/Global\/Infographics\/2026-04-Sales-and-Price\"><img decoding=\"async\" src=\"https:\/\/www.car.org\/-\/media\/CAR\/Images\/Learn-and-Thrive\/Infographics\/2026-04-Sales-and-Price-v2.png?h=2097&amp;w=3000&amp;hash=4C38509EB4D9A1BD7D9FACA749254777\" alt=\"\"\/><\/a><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After increasing in February, California existing home sales increased again in April. The California Association of Realtors (C.A.R.) reported that existing single-family home sales increased 3.9% in April to 275,580, up 4.1% year-over-year. The C.A.R. noted that the largest sales increase happened for homes priced at or above $2M with an 8.4% surge. The organization surmised the gains were driven by a strong stock market alongside lower mortgage rates in the first half of April.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The median price increased 2.9% month-over-month and up 0.4% year-over-year to $914,810. This price increase set a new all-time high driven by the shift in mix toward the high end of the market. Still, the statewide median price per square foot was $428, down from $431 a year ago. Moreover, the sales-price-to-list-price ratio was 100% in April, unchanged from a year ago.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">April&#8217;s unsold inventory index (UII), which measures the number of months needed to sell the supply of homes on the market at the current sales rate, declined 17.5% from February and was down 5.7% from March 2025. Total active listings rose from February 2026 but fell year-over-year for a second straight month. In the March report, the C.A.R. blamed a decline in inventory on the &#8220;lock-in effect&#8221;, where existing homeowners with low mortgage rates are reluctant to move and incur higher mortgage rates for a replacement residence. However, this lock-in has been a salient feature of the housing market for around four years, and April&#8217;s mix of inventory effects shows that lock-in is not a consistent driver of inventory dynamics.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The median time on market remained unchanged from 21 days a year ago to 21 days.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Georgia&#8217;s Housing Market &#8211; April, 2026<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">{No data made publicly available for April}<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Home closing thoughts<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Beyond the monthly data, several housing-related developments continue to shape affordability, supply, and market structure. Below are some of the more notable stories that caught my interest over the last month or so.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>The 21st Century ROAD to Housing Act<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.congress.gov\/bill\/119th-congress\/house-bill\/6644\">The 21st Century ROAD (Renewing Opportunity in the American Dream<\/a>)<a href=\"https:\/\/www.congress.gov\/bill\/119th-congress\/house-bill\/6644\"> to Housing Act<\/a> is a bi-partisan Federal effort to address the nation&#8217;s housing affordability crisis. On May 20th, <a href=\"https:\/\/financialservices.house.gov\/news\/documentsingle.aspx?DocumentID=411126\">the House passed the bill by an overwhelming majority of 396-13<\/a>. The Senate is expected to pass the bill as well despite the House slightly watering down <a href=\"https:\/\/www.cato.org\/blog\/there-back-again-21st-century-road-housing-act\">the Senate&#8217;s amendment to preventing institutional investors from buying homes<\/a>. Here are the highlights of the bill (from the legislation itself):<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Revises federal housing programs, including by expanding available financing for affordable housing and providing grants for planning and community development activities;<\/li>\n\n\n\n<li>Increases the maximum&nbsp;eligible income for the Department of Housing and Urban Development&#8217;s (HUD&#8217;s) HOME Investment Partnerships Program (grants to states and localities to support housing for low-income households) and&nbsp;establishes a grant program to assist regional, state, and local entities with&nbsp;strategies to support affordable housing;<\/li>\n\n\n\n<li>Exempts certain housing-related activities from the environmental review process, including certain construction, improvement, or rehabilitation of residential buildings;<\/li>\n\n\n\n<li>Excludes veterans&#8217; disability benefits from being considered as income for purposes of determining eligibility for the Veterans Affairs Supportive Housing (VASH) program;<\/li>\n\n\n\n<li>Establishes a pilot program to provide grants to public housing agencies (PHAs) and other owners of federally assisted housing to test the efficacy of temperature sensors to support compliance with temperature requirements;<\/li>\n\n\n\n<li>Eliminates the requirement that manufactured homes must be constructed with a permanent chassis;<\/li>\n\n\n\n<li>Authorizes HUD to conduct performance reviews of organizations that&nbsp;provide&nbsp;housing counseling services.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The bill emphasizes assistance to lower income households and reduces regulations that slow and prevent housing construction. The bill is traditional bi-partisan legislation with both parties accomplishing their goals. While the stock market sent ITB up 4.3% on the day of passage, I expect a net wash for publicly traded home builders as increasing supply will be a net constraint on margins and the ban on institutional investors eliminates a sales channel. Still, expanding the topline opportunity will help builder operations and cashflow. Moreover, the bill looks like a big win for American households.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Both the NAR and the NAHB celebrated passage of the bill.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.nar.realtor\/newsroom\/nar-statement-on-house-passage-of-the-21st-century-road-to-housing-act\">From the NAR<\/a>:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;The National Association of REALTORS\u00ae applauds House passage of the 21st Century ROAD to Housing Act, one of the most significant bipartisan housing packages Congress has considered in decades. ..This bill reflects the growing bipartisan consensus that the nation needs bold action to expand housing inventory, improve affordability, and create more pathways to homeownership and rental opportunity.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.nahb.org\/blog\/2026\/05\/housing-bill-house-vote\">From the NAHB<\/a>:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;In a significant victory for NAHB and the broader housing sector, the U.S. House of Representatives approved an amendment to the 21st Century ROAD to Housing Act that removes a build-to-rent (BTR) sales provision that would have hurt affordability and reduced much-needed housing supply.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mba.org\/news-and-research\/newsroom\/news\/2026\/05\/20\/mba-commends-house-leadership-on-passage-of-21st-century-road-to-housing-act\">From the MBA<\/a>:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;MBA commends House Financial Services Committee Chair French Hill, Ranking Member Maxine Waters, and the bipartisan group of lawmakers whose leadership and collaboration resulted in overwhelming passage of this consequential housing package. The House revisions addressed many key concerns raised by MBA and other stakeholders, strengthening the legislation while preserving important measures in the Senate\u2019s bill to boost housing supply and expand access to affordable mortgage credit.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Mixed Affordability News<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">While relief may be on the way for home buyers, May&#8217;s news offered a mix of perspectives on affordability developments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.nahb.org\/news-and-economics\/press-releases\/2026\/05\/housing-affordability-edges-up-in-first-quarter-but-challenges-persist\">The NAHB reported a small improvement in affordability in the first quarter<\/a> even though households remain cost-burdened. The reconvergence of the median prices for new and existing homes means that affordability is also the same for both categories. The National Association of Home Builders (NAHB)\/Wells Fargo Cost of Housing Index (CHI) improved for both median and low income households from Q4 2025 to Q1 2026. For new homes, the share of income needed to purchase a home fell from 34% to 32% for a median family and from 67% to 65% for a low-income family. For existing homes, the share of income needed fell from 34% to 32% for a median family and from 69% to 65% for a low-income family.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.nar.realtor\/newsroom\/new-metric-shows-housing-market-mismatch-more-homes-are-for-sale-but-not-at-prices-buyers-can-afford\">The NAR warned<\/a> that &#8220;households today can access about one-quarter fewer homes than they could in a balanced market.&#8221; In March 2026, the national &#8220;Listing-Income Alignment Score&#8221; remained below the pre-pandemic baseline of 84.4%. Still, the trend appears favorable as the score increased year-over-year from 66.7% to 74.9%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The C.A.R. reported <a href=\"https:\/\/www.car.org\/aboutus\/mediacenter\/newsreleases\/2026releases\/1qtr2026hai\">a 4-year high in affordability for Californians<\/a>. Specifically, &#8220;twenty-two percent of California households could afford to buy an $843,390 median-priced home in the first quarter of 2026, up from 21 percent in fourth-quarter 2025 and up from 19 percent in first-quarter 2025.&#8221; I expect a setback in affordability in Q2 as mortgage rates have been creeping higher and the median price hits a new record.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Spotlight on Mortgage Rates<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mba.org\/news-and-research\/newsroom\/all-news\" target=\"_blank\" rel=\"noreferrer noopener\">The Mortgage Bankers Association (MBA)<\/a> reported three weeks with a decrease in mortgage applications and one weekly increase for the month of May. For all of April, <a href=\"https:\/\/www.mba.org\/news-and-research\/newsroom\/news\/2026\/05\/19\/april-new-home-purchase-mortgage-applications-decreased-2.4-percent\" target=\"_blank\" rel=\"noreferrer noopener\">new home purchase mortgage applications decreased 2.4% year-over-year<\/a> but dropped 10% sequentially (not seasonally adjusted), a significant turnaround from March&#8217;s 26% month-over-month surge.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Mortgage rates rebounded sharply in May as the bond market continues to respond to <a href=\"https:\/\/inflationwatch.drduru.com\/from-sticky-to-streaky-inflation-looms-larger\/\">inflationary pressures in the economy<\/a>. Thus, I expect sharp pullbacks in new and existing home sales from the month, especially at the lower ends of the market.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_30-Year-Fixed-Rate-Mortgage-Average.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1320\" height=\"465\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_30-Year-Fixed-Rate-Mortgage-Average.png\" alt=\"Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; June 3, 2026.\" class=\"wp-image-81610\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_30-Year-Fixed-Rate-Mortgage-Average.png 1320w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2026\/06\/20260603_30-Year-Fixed-Rate-Mortgage-Average-768x271.png 768w\" sizes=\"auto, (max-width: 1320px) 100vw, 1320px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], <a href=\"https:\/\/fred.stlouisfed.org\/series\/MORTGAGE30US#\">retrieved from FRED<\/a>, Federal Reserve Bank of St. Louis; June 3, 2026.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">Be careful out there!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Full disclosure: long ITB, long DHI<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Housing Market Intro and Summary Across builder stocks, construction activity, permits, new home sales, and existing home sales, the same pattern persists: the housing market has yet to achieve the escape velocity needed to break free from its multiyear ranges. A month ago, the housing market and related stocks looked like they were clinging to &#8230; <a title=\"What Happened In the Housing Market &#8211; No Escape Velocity\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2026\/06\/03\/what-happened-in-the-housing-market-no-escape-velocity\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":69279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[59,266,35],"tags":[3127,1933,3184,2426,1053,2220,3492,2873,1003,1051,3382,1149,1160,2771,1410,3100,1206,3567,3186,1133,3458,3185,2689,1162,1159,1161,4042,2231,1674,1240,1238],"class_list":["post-81198","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-government","category-housing","tag-active-listings","tag-affordability","tag-affordable-housing","tag-c-a-r","tag-california","tag-california-association-of-realtors","tag-chi","tag-consumer-sentiment","tag-dhi","tag-dr-horton-inc","tag-existing-home-median-sales-price","tag-existing-home-sales","tag-hmi","tag-housing-inventory","tag-housing-starts","tag-ishares-us-home-construction-etf","tag-itb","tag-legislation","tag-mba","tag-merger-and-acquisition","tag-mortgage-applications","tag-mortgage-bankers-association","tag-mortgage-rates","tag-nahb","tag-nahbwells-fargo-housing-market-index","tag-national-association-of-home-builders","tag-national-association-of-home-builders-nahb-wells-fargo-cost-of-housing-index","tag-new-home-median-sales-price","tag-new-home-sales","tag-taylor-morrison-home-corporation","tag-tmhc"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - 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