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Yahoo
17 hours ago
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Housing market ‘purgatory' for existing home sales as activity falls to lowest level in 9 months
U.S. existing home sales fell sharply in June 2025, dropping to their lowest level in nine months as elevated mortgage rates and record-high prices continued to sideline many prospective buyers. According to the National Association of Realtors (NAR), existing home sales slipped 2.7% from May to a seasonally adjusted annual rate of 3.93 million transactions, exceeding analysts' expectations for a more modest decline. Compared with last year, sales were flat overall, with concentrated declines in several regions. The housing market is traditionally busiest in spring, but this year's key buying season proved lackluster. The month-over-month decline largely reflected affordability challenges: Mortgage rates hovered close to 7% throughout April and May, when most June closings would have entered contract. 'Existing home sales have been in purgatory since mortgage rates spiked in 2022,' Lance Lambert, editor-in-chief of ResiClub, told Fortune Intelligence. 'Some of that's because strained affordability in many markets is making it harder for sellers to find a buyer at their asking price—which is also why active inventory is rising. And some of it is because many would-be home sellers, who'd like to sell and buy something else, either can't afford that next payment or don't want to part with their lower mortgage rate and payment. No matter how you look at it, this is an unhealthy housing market.' Sky-high prices On a nationwide basis, home prices climbed to an all-time high, underpinning the market's affordability squeeze. The median price for existing homes reached $435,300 in June, up 2% from the same month a year earlier and marking the 24th consecutive month of yearly price gains. NAR chief economist Lawrence Yun sounded an optimistic tone about this staggering climb: 'The record-high median home price highlights how American homeowners' wealth continues to grow—a benefit of homeownership. The average homeowner's wealth has expanded by $140,900 over the past five years.' Despite weak sales, inventory is slowly rebuilding: 1.53 million homes were listed for sale at the end of June, up nearly 16% from a year ago—the highest level in years—though still 0.6% lower than in May owing to seasonal factors. This puts the market's unsold inventory at a 4.7-month supply, matching pre-pandemic norms and up from 4.0 months a year prior. Regional dynamics varied. Sales dropped in the Northeast, Midwest, and South, but edged higher in the West, with year-over-year changes mirroring these splits. Single-family home sales slipped 3%, while sales of condominiums and co-ops were stable compared with May but down 5.3% against June 2024. One positive for buyers: more supply and slightly longer time on market. reported that active inventory for June rose for the 20th straight month, climbing nearly 29% year over year to 1.08 million homes, and the average home spent 53 days on market, five days longer than a year earlier. However, these gains are offset by persistent undersupply when compared with the pre-pandemic market, and price cuts became more common, with nearly 21% of listings experiencing downward adjustments—the highest June share since 2016. 'Multiple years of undersupply are driving the record-high home price,' Yun said, noting that construction continues to lag population growth and is holding back first-time buyers. 'If the average mortgage rates were to decline to 6%, our scenario analysis suggests an additional 160,000 renters would become first-time homeowners and a boost in activity from existing homeowners,' Yun added. If mortgage rates decrease in the second half of this year, Yun said, he expects home sales to increase across the country owing to strong income growth, healthy inventory, and a record-high number of jobs. For now, though, it's a familiar story of peak prices and affordability as the main obstacles for would-be homebuyers in the U.S. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Zillow updates home price forecast for over 400 housing markets: See the map
Want more housing market stories from Lance Lambert's ResiClub in your inbox? Subscribe to the ResiClub newsletter. How to go from quiet to commanding Apple iOS 26 is now available to the public. Here's how to get it—and 5 useful new features to try Here's why Trump's proposed 401(k) executive order may be very bad news for your retirement This week, Zillow economists published their updated 12-month forecast, projecting that U.S. home prices—as measured by the Zillow Home Value Index—will fall by 1.0% between June 2025 and June 2026. For calendar year 2025, they forecast U.S. home prices, as measured by the Zillow Home Value Index, will fall -2.0%. Heading into 2025, Zillow's 12-month forecast for U.S. home prices was +2.6%. However, many housing markets across the country softened faster than expected, prompting Zillow to issue several downward revisions. While Zillow has since stopped cutting its outlook, it is still kind of bearish. At least over the short-term. Why did Zillow downgrade its forecast for national home prices so many times this year? 'The rise in [active] listings is fueling softer [home] price growth, as greater supply provides more options and more bargaining power for buyers,' Zillow economists wrote in March. 'Potential buyers are opting to remain renters for longer as affordability challenges suppress demand for home purchases.' Essentially, Zillow believes that strained housing affordability—driven by U.S. home prices soaring over 40% during the Pandemic Housing Boom and mortgage rates jumping from 3% to 6% in 2022—is putting upward pressure on active inventory growth and short-term downward pressure on home price growth. 'Sellers have been motivated to join the market through the first half of the year, but buyer demand hasn't kept up. With housing inventory accumulating, Zillow forecasts home values will decline by 2.0% in [calendar year] 2025,' wrote Zillow economists on Wednesday. 'Slightly lower mortgage rates toward the end of the year could further aid affordability, but significant improvements appear unlikely. Still, home shoppers have some advantages–plenty of options have given them more bargaining power than in any summer in at least seven years.' According to Zillow's home price model, the listing site also believes that weakening and softening housing markets across the Sun Belt will weigh on nationally aggregated home prices this year. Among the 300 largest U.S. metro area housing markets, Zillow expects the strongest home price appreciation between June 2025 and June 2026 to occur in these 10 areas: Atlantic City, NJ → 2.9% Kingston, NY → 2.2% Knoxville, TN → 2.0% Torrington, CT → 1.9% Rockford, IL → 1.7% Concord, NH → 1.7% Pottsville, PA → 1.7% Fayetteville, AR → 1.6% Norwich, CT → 1.6% East Stroudsburg, PA → 1.5% Among the 300 largest U.S. metro area housing markets, Zillow expects the weakest home price appreciation between April 2025 and April 2026 to occur in these 10 areas: Houma, LA → -9.6 Lake Charles, LA → -9.5% Alexandria, LA → -8.0% New Orleans, LA → -7.2% Lafayette, LA → -7.0% Shreveport, LA → -6.9% Beaumont, TX → -6.5% San Francisco, CA → -6.1% Austin, TX → -5.1% Corpus Christi, TX → -5.0 Below is what the current year-over-year rate of home price growth looks like for single-family and condo home prices. The Sun Belt, in particular Southwest Florida, is currently the epicenter of housing market weakness right now. This post originally appeared at to get the Fast Company newsletter: Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Zillow updates home price forecast for over 400 housing markets: See the map
Want more housing market stories from Lance Lambert's ResiClub in your inbox? Subscribe to the ResiClub newsletter. How to go from quiet to commanding Apple iOS 26 is now available to the public. Here's how to get it—and 5 useful new features to try Here's why Trump's proposed 401(k) executive order may be very bad news for your retirement This week, Zillow economists published their updated 12-month forecast, projecting that U.S. home prices—as measured by the Zillow Home Value Index—will fall by 1.0% between June 2025 and June 2026. For calendar year 2025, they forecast U.S. home prices, as measured by the Zillow Home Value Index, will fall -2.0%. Heading into 2025, Zillow's 12-month forecast for U.S. home prices was +2.6%. However, many housing markets across the country softened faster than expected, prompting Zillow to issue several downward revisions. While Zillow has since stopped cutting its outlook, it is still kind of bearish. At least over the short-term. Why did Zillow downgrade its forecast for national home prices so many times this year? 'The rise in [active] listings is fueling softer [home] price growth, as greater supply provides more options and more bargaining power for buyers,' Zillow economists wrote in March. 'Potential buyers are opting to remain renters for longer as affordability challenges suppress demand for home purchases.' Essentially, Zillow believes that strained housing affordability—driven by U.S. home prices soaring over 40% during the Pandemic Housing Boom and mortgage rates jumping from 3% to 6% in 2022—is putting upward pressure on active inventory growth and short-term downward pressure on home price growth. 'Sellers have been motivated to join the market through the first half of the year, but buyer demand hasn't kept up. With housing inventory accumulating, Zillow forecasts home values will decline by 2.0% in [calendar year] 2025,' wrote Zillow economists on Wednesday. 'Slightly lower mortgage rates toward the end of the year could further aid affordability, but significant improvements appear unlikely. Still, home shoppers have some advantages–plenty of options have given them more bargaining power than in any summer in at least seven years.' According to Zillow's home price model, the listing site also believes that weakening and softening housing markets across the Sun Belt will weigh on nationally aggregated home prices this year. Among the 300 largest U.S. metro area housing markets, Zillow expects the strongest home price appreciation between June 2025 and June 2026 to occur in these 10 areas: Atlantic City, NJ → 2.9% Kingston, NY → 2.2% Knoxville, TN → 2.0% Torrington, CT → 1.9% Rockford, IL → 1.7% Concord, NH → 1.7% Pottsville, PA → 1.7% Fayetteville, AR → 1.6% Norwich, CT → 1.6% East Stroudsburg, PA → 1.5% Among the 300 largest U.S. metro area housing markets, Zillow expects the weakest home price appreciation between April 2025 and April 2026 to occur in these 10 areas: Houma, LA → -9.6 Lake Charles, LA → -9.5% Alexandria, LA → -8.0% New Orleans, LA → -7.2% Lafayette, LA → -7.0% Shreveport, LA → -6.9% Beaumont, TX → -6.5% San Francisco, CA → -6.1% Austin, TX → -5.1% Corpus Christi, TX → -5.0 Below is what the current year-over-year rate of home price growth looks like for single-family and condo home prices. The Sun Belt, in particular Southwest Florida, is currently the epicenter of housing market weakness right now. This post originally appeared at to get the Fast Company newsletter: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Largest U.S. homebuilder: Housing market shift ‘still pointing towards' bigger incentives
Want more housing market stories from Lance Lambert's ResiClub in your inbox? Subscribe to the ResiClub newsletter. Here's why Trump's proposed 401(k) executive order may be very bad news for your retirement Apple iOS 26 is now available to the public. Here's how to get it—and 5 useful new features to try Here's what happened when Albuquerque made riding the bus free On Tuesday, D.R. Horton—America's most valuable and largest homebuilder, with a $46 billion market capitalization and ranked No. 123 on the Fortune 500—reported its third-quarter earnings for the three months ending June 30. While D.R. Horton's earnings didn't wow investors, the fact that there wasn't an accelerated softening beyond what homebuilders—including D.R. Horton—had already reported earlier this year was enough for some Wall Street investors to buy back into homebuilder stocks. For today's piece, we're going to take a closer look at D.R. Horton's earnings and the commentary its executives provided during Tuesday's earnings call. Incentive spending is helping D.R. Horton's home sales hold steady D.R. Horton's net new orders, by its fiscal Q3 (the three months ending June 30th): Q3 2018 —> 14,650 Q3 2019 —> 15,588 Q3 2020 —> 21,519 Q3 2021 —> 17,952 Q3 2022 —> 16,693 Q3 2023 —> 22,879 Q3 2024 —> 23,001 Q3 2025 —> 23,071 D.R. Horton continues to see weakness in Florida While D.R. Horton's national net orders were pretty much flat year-over-year, there was a -10.1% year-over-year drop in its Southeast division. That division includes Florida—which D.R. Horton once again acknowledged remains on the softer/weaker side. 'There's been a lot of a change [weakening] in the dynamic in the Florida markets. And perhaps most so there. Other markets continue to be consistent performers where there's been limited inventory and limited development of lots. And housing production continues to see strong demand in those markets,' D.R. Horton chief operating officer Michael Murray said during their earnings call on July 22, 2025. North (13% of D.R. Horton's Q3 2025 net new orders): Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia, and Wisconsin East (21%): Georgia, North Carolina, South Carolina, and Tennessee Northwest (6%): Colorado, Oregon, Utah, and Washington South Central (27%): Arkansas, Oklahoma, and Texas Southwest (10%): Arizona, California, Hawaii, Nevada, and New Mexico Southeast (24%): Alabama, Florida, Louisiana, and Mississippi D.R. Horton's average sales price moves sideways D.R. Horton's average sales price in Q3 2025 ($369,600) was -7.3% below the third-quarter peak in Q3 2022 ($398,800). It's possible that some of the drop in average sales price is due to shifts in product and geographic mix. Instead of outright price cuts, D.R. Horton has preferred to offer bigger incentives this cycle, such as mortgage rate buydowns. Regardless, D.R. Horton's average sales price confirms that upward pricing momentum has stalled in many markets. D.R. Horton's incentive spend has caused margin compression D.R. Horton reported a 21.8% gross margin on homes for Q3 2025. That's down from 24.0% in Q3 2024; however, it's unchanged from its Q2 2025 gross margin (21.8%). The fact that the margin didn't further compress quarter-over-quarter is why some investors bought the stock back. However, D.R. Horton acknowledged that, looking ahead, the ongoing housing market softening still points towards a bit higher incentives. 'Our commentary really over the last year has been that incentives have been increasing. That's been the main driver for the gross margin decline over the last year. Our operators are striving every day to strike the best balance between hitting pace and maintaining margin in each community to maximize returns. And so they're using all the levers they have with incentives to try to balance that. And so we have seen the pace of incentive cost increases and the pace of margin decline moderate a bit over the last couple of quarters and then this quarter it held flat sequentially [quarter-over-quarter],' Jessica Hansen, head of investor relations at D.R. Horton, said during their earnings call on July 22, 2025. Hansen added that: 'But the trend is still pointing towards a bit higher incentives, and we don't see significant offsets to that, though we will continue to work on costs on the construction side.' On Tuesday, D.R. Horton told investors expect Q4 2025 gross margins to come in between 21.0% and 21.5%. Labor hasn't been an issue for D.R. Horton yet despite the increased ICE crackdown 'From labor availability, it's plentiful. We have the labor that we need. Our trades are looking for work. And that's why you've seen sequential and year-over-year reduction in our cycle time. Because we have the support we need to get our homes built. And, you know, given those efficiencies, reductions in stick and brick [costs] over time. Some of that is from design. And efficiency of the product that we're putting in the field. And some of that is just from the efficiency of our operations,' D.R. Horton CEO Paul Romanowski said during their earnings call on July 22, 2025. Tariffs haven't coincided with higher stick-and-brick costs—but lumber tariffs are something to watch On Tuesday, D.R. Horton told analysts that stick-and-brick costs are down 2% year-over-year and down 1% quarter-over-quarter. Note: My understanding is that 'stick-and-brick costs' include direct construction costs of building a home on-site using traditional wood materials like lumber ('sticks') and masonry materials like concrete ('bricks'). These costs include both materials (e.g., lumber, drywall) and labor (plumbers, roofers, etc.). Although the White House hasn't included Canadian softwood lumber on their broader tariff list, the U.S. government is preparing to more than double the duties on Canadian lumber imports. As a part of its annual review, the U.S. Department of Commerce plans to raise the tariff on Canadian lumber from 14.45% to 34.45%. The U.S. Department of Commerce argues that Canadian lumber is being unfairly subsidized and sold below market value in the U.S. 'It [higher duties on Canadian lumber] will have some potential impact, but we've not quantified that. I know it is a significant step up in the tariff rates, I think, going to effect next month. But, you know, we're buying some percentage of that wood and there's some substitutionary product that would be available as well. Based on where that pricing ultimately settles,' D.R. Horton chief operating officer Michael Murray said during their earnings call on July 22, 2025. Homebuilder stocks got a little bounce following D.R. Horton's earnings Following the earnings reports from D.R. Horton and PulteGroup on Tuesday, Wall Street gave homebuilder shares a slight bounce. While the move doesn't return shares to the highs reached around September 2024, it could signal that some on Wall Street believe homebuilder margin compression is losing momentum. This post originally appeared at to get the Fast Company newsletter: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fast Company
4 days ago
- Business
- Fast Company
Largest U.S. homebuilder: Housing market shift ‘still pointing towards' bigger incentives
Want more housing market stories from Lance Lambert's ResiClub in your inbox? Subscribe to the ResiClub newsletter. On Tuesday, D.R. Horton—America's most valuable and largest homebuilder, with a $46 billion market capitalization and ranked No. 123 on the Fortune 500—reported its third-quarter earnings for the three months ending June 30. While D.R. Horton's earnings didn't wow investors, the fact that there wasn't an accelerated softening beyond what homebuilders— including D.R. Horton —had already reported earlier this year was enough for some Wall Street investors to buy back into homebuilder stocks. For today's piece, we're going to take a closer look at D.R. Horton's earnings and the commentary its executives provided during Tuesday's earnings call. Incentive spending is helping D.R. Horton's home sales hold steady D.R. Horton's net new orders, by its fiscal Q3 (the three months ending June 30th): Q3 2018 —> 14,650 Q3 2019 —> 15,588 Q3 2020 —> 21,519 Q3 2021 —> 17,952 Q3 2022 —> 16,693 Q3 2023 —> 22,879 Q3 2024 —> 23,001 Q3 2025 —> 23,071 D.R. Horton continues to see weakness in Florida While D.R. Horton's national net orders were pretty much flat year-over-year, there was a -10.1% year-over-year drop in its Southeast division. That division includes Florida—which D.R. Horton once again acknowledged remains on the softer/weaker side. 'There's been a lot of a change [weakening] in the dynamic in the Florida markets. And perhaps most so there. Other markets continue to be consistent performers where there's been limited inventory and limited development of lots. And housing production continues to see strong demand in those markets,' D.R. Horton chief operating officer Michael Murray said during their earnings call on July 22, 2025. North (13% of D.R. Horton's Q3 2025 net new orders): Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia, and Wisconsin East (21%): Georgia, North Carolina, South Carolina, and Tennessee Northwest (6%): Colorado, Oregon, Utah, and Washington South Central (27%): Arkansas, Oklahoma, and Texas Southwest (10%): Arizona, California, Hawaii, Nevada, and New Mexico Southeast (24%): Alabama, Florida, Louisiana, and Mississippi D.R. Horton's average sales price moves sideways D.R. Horton's average sales price in Q3 2025 ($369,600) was -7.3% below the third-quarter peak in Q3 2022 ($398,800). It's possible that some of the drop in average sales price is due to shifts in product and geographic mix. Instead of outright price cuts, D.R. Horton has preferred to offer bigger incentives this cycle, such as mortgage rate buydowns. Regardless, D.R. Horton's average sales price confirms that upward pricing momentum has stalled in many markets. D.R. Horton's incentive spend has caused margin compression D.R. Horton reported a 21.8% gross margin on homes for Q3 2025. That's down from 24.0% in Q3 2024; however, it's unchanged from its Q2 2025 gross margin (21.8%). The fact that the margin didn't further compress quarter-over-quarter is why some investors bought the stock back. However, D.R. Horton acknowledged that, looking ahead, the ongoing housing market softening still points towards a bit higher incentives. 'Our commentary really over the last year has been that incentives have been increasing. That's been the main driver for the gross margin decline over the last year. Our operators are striving every day to strike the best balance between hitting pace and maintaining margin in each community to maximize returns. And so they're using all the levers they have with incentives to try to balance that. And so we have seen the pace of incentive cost increases and the pace of margin decline moderate a bit over the last couple of quarters and then this quarter it held flat sequentially [quarter-over-quarter],' Jessica Hansen, head of investor relations at D.R. Horton, said during their earnings call on July 22, 2025. Hansen added that: 'But the trend is still pointing towards a bit higher incentives, and we don't see significant offsets to that, though we will continue to work on costs on the construction side.' On Tuesday, D.R. Horton told investors expect Q4 2025 gross margins to come in between 21.0% and 21.5%. Labor hasn't been an issue for D.R. Horton yet despite the increased ICE crackdown 'From labor availability, it's plentiful. We have the labor that we need. Our trades are looking for work. And that's why you've seen sequential and year-over-year reduction in our cycle time. Because we have the support we need to get our homes built. And, you know, given those efficiencies, reductions in stick and brick [costs] over time. Some of that is from design. And efficiency of the product that we're putting in the field. And some of that is just from the efficiency of our operations,' D.R. Horton CEO Paul Romanowski said during their earnings call on July 22, 2025. Tariffs haven't coincided with higher stick-and-brick costs—but lumber tariffs are something to watch On Tuesday, D.R. Horton told analysts that stick-and-brick costs are down 2% year-over-year and down 1% quarter-over-quarter. Note: My understanding is that 'stick-and-brick costs' include direct construction costs of building a home on-site using traditional wood materials like lumber ('sticks') and masonry materials like concrete ('bricks'). These costs include both materials (e.g., lumber, drywall) and labor (plumbers, roofers, etc.). Although the White House hasn't included Canadian softwood lumber on their broader tariff list, the U.S. government is preparing to more than double the duties on Canadian lumber imports. As a part of its annual review, the U.S. Department of Commerce plans to raise the tariff on Canadian lumber from 14.45% to 34.45%. The U.S. Department of Commerce argues that Canadian lumber is being unfairly subsidized and sold below market value in the U.S. 'It [higher duties on Canadian lumber] will have some potential impact, but we've not quantified that. I know it is a significant step up in the tariff rates, I think, going to effect next month. But, you know, we're buying some percentage of that wood and there's some substitutionary product that would be available as well. Based on where that pricing ultimately settles,' D.R. Horton chief operating officer Michael Murray said during their earnings call on July 22, 2025. Homebuilder stocks got a little bounce following D.R. Horton's earnings Following the earnings reports from D.R. Horton and PulteGroup on Tuesday, Wall Street gave homebuilder shares a slight bounce. While the move doesn't return shares to the highs reached around September 2024, it could signal that some on Wall Street believe homebuilder margin compression is losing momentum. The super-early-rate deadline for Fast Company's Most Innovative Companies Awards is tonight, July 25, at 11:59 p.m. PT. Apply today.
