US Housing: Sales, Builders and Mortgage Rates — 2026-10-24
The U.S. housing market remains deeply frozen, with pending home sales hitting a record low in September and homebuilder sentiment dropping to a 14-year low. While mortgage rates showed a slight dip in late October, they remain near three-year highs, severely restricting buyer affordability and forcing builders to rely on heavy incentives.
US Housing: Sales, Builders and Mortgage Rates — 2026-10-24
Top developments
Pending Home Sales Hit Record Low as Rates Persist
Pending sales of existing U.S. homes fell to a record low in September, signaling a sharp decline in buyer demand as high mortgage rates continue to weigh heavily on the market. This drop follows a brief, marginal rise in closed sales in September, which is now expected to be reversed by the ongoing rate surge. The data suggests that activity will remain depressed through the remainder of the year as buyers wait for significant rate relief.
Homebuilder Sentiment Plummets to 14-Year Low
Homebuilder confidence has fallen to its lowest level since June 2012, reflecting severe pressure on the construction sector. Builders are facing a dual challenge: rising mortgage costs are pushing potential buyers to the sidelines, while many who remain in the market are demanding significant price concessions. This sentiment shift indicates that the sector is bracing for a prolonged period of weak demand.
Mortgage Rates Show First Decline in Nine Weeks
For the first time in nine weeks, mortgage rates experienced a slight decline, with the average 30-year fixed rate falling to 7.32% from 7.40% in the previous week. While this offers a small reprieve to borrowers, rates remain at their highest levels in nearly three years. The relief is minor in the context of an eight-week consecutive increase that has significantly reduced purchasing power.
Builder ETFs Down 30% as Profits Compress
The iShares U.S. Home Construction ETF (ITB) is currently 30% below its October 2024 peak, driven by earnings that have declined faster than stock prices. Major builders are struggling with compressed margins, with some firms seeing gross margins fall to 15.8% as they utilize incentives near 12% of the home price to move inventory. The sector is trading at a premium P/E relative to its median, despite the deteriorating fundamentals.
Local view
Hispanic Buyers Face "Deeply Frozen" Market
Local Spanish-language outlets are highlighting the disproportionate impact of the housing freeze on Hispanic buyers, describing the market as "deeply frozen" with sales at 30-year lows. Reports indicate that for many Latino families in areas like Maryland and Virginia, the "American Dream" of homeownership is becoming increasingly inaccessible due to a combination of high prices and restrictive lending conditions.
Negotiation Power Shifts in Select Cities
Despite the national freeze, specific markets are offering buyers more leverage. Media coverage notes that inventory increases in cities like Greenville and Nashville are allowing buyers to successfully negotiate for price reductions, seller contributions, and contractual improvements. These opportunities represent a rare pocket of buyer power in an otherwise seller-resistant environment.
Context & numbers
Mortgage Rates: The average 30-year fixed mortgage rate stands at 7.32% as of the week ending October 22, 2026.
Sales Volume: Existing-home sales in September were reported at a seasonally adjusted annual rate of 3.99 million.
Builder Margins: Recent earnings data shows gross margins compressing to 15.8% for some major builders, with incentives reaching 10-12% of price.
On the radar
Upcoming NAR Data: The National Association of Realtors is scheduled to release October Existing-Home Sales data on November 12, 2026, and Pending Home Sales for October on November 18, 2026.
Goldman Sachs 2027 Forecast: Analysts are watching for Goldman Sachs' updated 2027 housing market forecast, which is expected to provide further clarity on the duration of the current affordability crisis.
Lennar Community Expansions: Despite the downturn, Lennar is expanding its footprint with new communities in Georgia, Alabama, and New Jersey, issuing $600 million in senior notes to fund general corporate purposes.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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