Key Takeaways:
The US housing market is stirring in pockets, even as high mortgage rates and prices keep national sales largely flat.
Pending home sales — contracts signed but not yet closed — rose 1.4% in April from March and 3.2% from a year earlier, the National Association of Realtors reported Tuesday. The increase offers a tentative signal that buyers are returning to certain markets, even as the 30-year fixed mortgage rate climbed back to 6.51% from a February low of 5.98%, according to Freddie Mac data.
"The pickup in pending sales suggests buyers are coming out with cautious optimism," said Lawrence Yun, chief economist at the National Association of Realtors. "Demand will easily be even higher once mortgage rates retreat to the levels they were at earlier this year."
The gains were heavily concentrated. West Palm Beach, Florida, posted a near-40% jump in pending sales from a year earlier, the strongest among major US metros tracked by Redfin. San Jose, Chicago and Oakland, California, also recorded notable increases. In Austin, Texas, existing home sales surged 20% year-over-year, Zillow reported, as inventory levels climbed 52% above pre-pandemic averages — the highest recovery of any major US city.
"After years of low supply, markets with restocked shelves are seeing relatively stronger sales growth," said Orphe Divounguy, senior economist at Zillow. "Now those same markets with a wealth of options for buyers are seeing recovering sales, as incomes are more in line with prices."
The divide between recovering and stagnant markets is widening.
Nationwide, the picture remains constrained. Home sales fell year-over-year in each of the first three months of 2026 and flatlined in April, according to Bankrate. The REMAX National Housing Report for April showed sales up 7.6% from March — typical for the spring selling season — but just 0.1% from a year ago. The median sales price rose 1.5% to $445,000, marking the 34th consecutive month of year-over-year price appreciation. Inventory stood at 2.3 months' supply, below the 4-to-6-month range that defines a balanced market.
The US homeownership rate has slipped to 65%, a six-year low, and is expected to fall further this year, Yun warned. "Unless supply meaningfully increases, home price growth could outpace wage growth," he said.
Several Northeastern markets continue to struggle with persistent inventory shortages. New York recorded an 8.7% drop in existing home sales, while Philadelphia fell 7.7% and Providence declined 8%, according to Zillow. In contrast, Milwaukee posted a 14.4% gain and Richmond, Virginia, saw sales rise 12.7%.
Toll Brothers, the luxury homebuilder, reported improving conditions in previously weak markets. "Both Austin and Florida might be seeing green shoots from all builders," Chief Executive Officer Karl Mistry said on a May 20 earnings call. The company's luxury focus has insulated it from some of the broader affordability pressures, Mistry noted, with strong results also in Las Vegas, Boise and the coastal corridor from Boston to South Carolina.
TD Bank economists struck a cautious note on the national outlook. "Poor affordability is keeping buyers on the sidelines while higher rates make homeowners hesitant to sell outside of demographics and necessity," wrote Eli Nir, Oscar Munoz and Molly Brooks in a recent note. "We do not see significant room for acceleration in the housing market this year, while lower rates in 2027 could provide a slight boost."
The risk is that rising mortgage rates reverse the nascent recovery. Redfin's weekly data showed buyer demand softening after the latest rate increase. "Higher mortgage rates are scaring off some buyers, but that's opening the door for others," said Chen Zhao, head of economics research at Redfin.
This article is for informational purposes only and does not constitute investment advice.
