Journal reporter Nicole Friedman, who joined us in the second episode of our housing series this morning, says that doesn't bode well for what's left of 2026.

The spring market is really crucial for the rest of the year.

A lot of people want to move in the spring or move over the summer, and so if they miss that opportunity, they might delay it a whole year.

And so some of the demand that didn't show up this spring won't necessarily come later in the year.

We might have to wait until 2027.

If conditions get better in the fall or even the winter, we see a decline in mortgage rates or a decline in home prices, an increase in inventory, there are definitely a lot of buyers that would jump on that.

But it wouldn't be as big of a wave as we would have seen this spring if the conditions had been better.

But Nicole says that as some of that volatility settles down, where rates land could still make a difference for the housing market.

I mean, have you found anything that kinda hits that sweet spot? I mean, that's the center of the Venn diagram that pretty much everyone, I guess, whether you're building multifamily or single family homes, would be, would be wanting to, to, to unlock.

Yeah, there are lots of technologies that people are experimenting with, are using on small scale.

I think we have yet to see any new emerging technology really kind of catch on in terms of making a huge change to the industry and being widely adopted, but that's not to say that that couldn't happen in the coming years.

I think it's just still an era of experimentation and figuring out, you know, how to apply these technologies.

And the truth is, a lot of large builders are super efficient already, even though they're using more traditional techniques.

They have the economies of scale.

They have, you know, the ability to really kind of go from one site to another very quickly and use the same labor force across a large construction site.

Are there other potential drawbacks of, of this rethink of how houses are built?

Journal reporter Nicole Friedman says this is a sign of life for the housing market, but the trend might not last.

Mortgage rates did come down somewhat in April, and so that probably lured some buyers off the sidelines, but the big obstacle is that mortgage rates have started rising again, and now there's increased expectations that the Federal Reserve could actually raise short-term rates.

That would really push mortgage rates higher and could stall some of this momentum in the housing market.

Mortgage rates are really the big determiner here, and so this could be just a one-month increase and not necessarily a more sustained improvement.

Is there a, I guess, a scenario in real estate sales here, at least residential ones, where you just kinda gotta hold out if you can?

So it's a really tough call for different agents.

I mean, a lot of people, even if they pull back from the industry, maybe find work elsewhere, they're still holding onto their licenses.

You know, they still want to kind of have a foot in the door in case the market picks up, in case they can find an opportunity down the line.

But a lot of people are, you know, no longer getting a full-time income from their work.

And there's a survey from the National Association of Realtors that, um, shows that 71% of agents said real estate was their only profession last year, and that's the lowest proportion on record.

They've been asking this survey question for about 20 years.

Explain.

So what's gone wrong in March?

It's surprising because the March home sales mostly reflect people who are actually out shopping in January and February, and so what this shows is that even when rates were falling, that just wasn't enough to actually jumpstart home sales activity.

Buyers are kind of still f- just freaked out about the economy.

They're nervous about the job market.

Is that playing a role here at all?

Next month, when we see the April data, that's going to be a bigger indication of what the effect of the war in Iran has been on the housing market, because we really saw rates start to rise in March pretty quickly.

So this is a pretty bad sign for the rest of the year because spring is the busiest time for home purchases, home sales, and the National Association of Realtors had been very bullish coming into twenty twenty-six and had forecasted a fourteen percent increase in existing home sales this year, and now they're calling for just a four percent increase.

They're looking at what we saw in the first quarter of the year and saying this just isn't going to be the rebound year that they had hoped for.

So Nicole, what's pushing HOA fees so much higher?

So homeowner association fees and condo association fees have both risen a lot in recent years, and that's really driven by the cost of property insurance and also the cost of labor and materials.

There's been a big jump in insurance costs following the Surfside condo collapse in 2021 in Florida, which brought a lot more scrutiny toward how safe these buildings are structurally, especially older buildings.

And it's estimated that about one in four households that owns in the United States pays one of these monthly fees.

For condo associations, the median monthly fee last year was $420, and that's a 29% increase from 2019.

And then for single family associations, the median fee last year is lower.

It's just $63 a month, but that's still a big jump.

And what does this mean for home sales?

How does what the company is saying reflect different housing trends across the country?

Yeah.

So we have definitely seen different housing markets in different parts of the country.

There's been a lot more competition and rising home prices in the Northeast and Midwest, where the inventory is still lower than normal.

But in the South and West, we've seen much slower housing markets, even declining prices, and that's because there's been more supply of homes for sale in a lot of those markets.

Also, as PulteGroup noted, in the West, there's been more concern about a slowdown in the tech sector, in white-collar job hiring, and a lot of people are just unwilling to make a big purchase like buying a home if they're not confident about their job security.

And then Florida is interesting because it's been one of the slowest markets in the country.

Nicole, how are home builders trying to tackle affordability?

How does what the company is saying reflect different housing trends across the country?

Yes, so we have definitely seen different housing markets in different parts of the country.

There's been a lot more competition and rising home prices in the Northeast and Midwest, where the inventory is still lower than normal, but in the South and West, we've seen much slower housing markets, even declining prices, and that's because there's been more supply of homes for sale in a lot of those markets.

Also, as PulteGroup noted, in the West, there's been more concern about a slowdown in the tech sector, in white-collar job hiring, and a lot of people are just unwilling to make a big purchase, like buying a home, if they're not confident about their job security.

And then Florida is interesting because it's been one of the slowest markets in the country.

We've seen a lot of inventory for sale in Florida, falling prices, and so now we're starting to hear from home builders and from local real estate agents that there's some pickup in demand in Florida.

And so it's going to be important to watch this spring, whether we're starting to see a turnaround in that market, and if the lower prices there are starting to bring some buyers back.

Nicole, how are home builders trying to tackle affordability?

How does what the company is saying reflect different housing trends across the country?

Yeah.

So we have definitely seen different housing markets in different parts of the country.

There's been a lot more competition and rising home prices in the Northeast and Midwest, where the inventory is still lower than normal.

But in the South and West, we've seen much slower housing markets, even declining prices, and that's because there's been more supply of homes for sale in a lot of those markets.

Also, as PulteGroup noted, in the West, there's been more concern about a slowdown in the tech sector, in white collar job hiring, and a lot of people are just unwilling to make a big purchase like buying a home if they're not confident about their job security.

And then Florida is interesting because it's been one of the slowest markets in the country.

Nicole, how are home builders trying to tackle affordability?

Why is it, I guess, that homes might sit for a long time after they're listed?

Yeah, so some of it real estate agents say is just overpricing, right? That home sellers are still remembering those boom years.

They know what their neighbor sold for a couple of years ago.

And so sellers can be a little bit stubborn about what price they want to get from their home.

And so part of it is that sellers are still being kind of overly optimistic and homes that are priced too high right now are just sitting.

Buyers are not as eager to pay those high prices.

And then also homes that really are not move-in ready, homes that maybe need repairs or renovation, that can also really spook buyers right now.

Explain the ride that they were on.

What's behind those dynamics?

So mortgage rates are now around six point two percent for a 30-year fixed rate, and the start of 2025, they were closer to seven percent, so that can make a big difference in a monthly payment for a buyer.

And rates have come down really on expectations about the Federal Reserve cutting short-term rates.

And more recently, President Trump announced that he's instructing Fannie Mae and Freddie Mac to purchase mortgage bonds, which could also somewhat lower mortgage rates, and so we have seen rates dip slightly on that news as well.

And then with home price growth, really what we're seeing there is that the number of homes for sale has been rising, and so that gives buyers more to choose from and means there's less competition, less of those bidding wars that we heard so much about a few years ago.

And so we are seeing buyers have more negotiating leverage.

They're able to get homes for under the asking price.

Are analysts expecting this momentum and the dynamics that you talked about to continue and create more of a turnaround this year?

And so to your point, have the results lived up to expectations?

So the overall answer is no.

Each of these companies has spent money on affordable housing, but none of them have moved forward quite as quickly or as smoothly as advocates had hoped and had expected back in 2019.

And particularly the parts of the pledges that were land, those have really moved slowly or have made very little progress at all, and no housing has actually been built on these parcels yet.

And there's a lot of reasons for that.

We did have the pandemic, which slowed down a lot of these initiatives.

We've also just had a shift in the economy and the overall kind of real estate needs of these companies.

Why are these companies now struggling so much to solve something like the housing crisis?

Which one are we seeing now?

So it really depends where in the country you are, but generally, looking nationally, the market is transitioning from a seller's market into at least a balanced market, if not a buyer's market.

And this is a big change.

So certainly in the Southeast and Southwest it is a buyer's market, whereas in the Northeast and Midwest there's still not enough homes on the market and so those areas are still more competitive.

We're still seeing homes selling more quickly, a little bit more competition, but the inventory is rising everywhere and so even those faster markets in the Northeast and Midwest, they're starting to slow down too.

And nationally, an analysis by Redfin says that there, in April, were almost half a million more sellers than buyers.

And so that really shows the imbalance right now, that there's more homes on the market than there are people who are looking and able to buy right now.

Does this shift mean that they finally have their shot?

What does that data tell us about where the housing market is heading as we go into the summer?

So the data really shows that this spring has gotten off to a slow start.

The number of existing home sales fell in March and fell again in April.

And that's on a seasonally adjusted basis, but it does indicate that buyers are hesitant right now.

They're still on the sidelines and we're seeing the inventory rise, but we're not seeing sales rise with it, which means that even though buyers have more to choose from, it's really that affordability, those mortgage rates and home prices, that are hard to swallow.

And so really without a change in mortgage rates, economists think it's unlikely that the market will pick up in the coming months.

So really all eyes are on mortgage rates.

It has to do with the school year, right?

But for many buyers, that dream is still out of reach.

There are people that just say, like, "I can't swallow buying a home at these prices." And so they're saying, you know, "I'm really kind of waiting for a steep decline in home prices before I get in." But economists say that's unlikely.

They just say look at the supply picture, that the inventory of homes on the market, but also just the inventory of homes that exist in this country is below historical norms and below what demand is, and they're saying that it's unlikely that we're gonna see some major decline in home values the way that we saw, you know, back during the financial crisis.

And so people that are really holding out for that might continue to be frustrated.

But then there's also people I talk to who say, "You know, I was waiting to see it get more affordable, but year after year, home prices kept going up, and so I felt like I shouldn't keep waiting.

I should just jump in now because at least I'll get something."

What are some other factors that could shape the housing market this year and, say, like two, three years down the line?

It always comes back to supply and demand.