May 26, 2026 – Is It Almost Summer Already?

Economic Commentary

Is it us or is this year moving extraordinarily fast? We just celebrated Memorial Day, which is the unofficial start of the summer season.  Even pools up north are open by Memorial Day.  Memorial Day is also the time when the spring real estate market morphs into the summer season. But there was so much going on this spring that we are wondering whether the season will become extended. Between the Iranian conflict, higher gas prices and fluctuating mortgage rates there has been a lot for the real estate market to absorb.

These factors did not cancel the spring selling season, but they certainly caused demand to be somewhat muted, especially in certain areas of the country.  We continue to believe that there is a good amount of latent demand built up and it would not take much to keep the ball rolling throughout the summer. What factors could help this equation? One factor is already present – there are more homes available for prospective purchasers. A shortage of inventory has been a factor which has kept demand lower for quite a few years. Another factor would be a true resolution of the conflict in Iran. 

Ending the conflict would likely bring both gas prices and mortgage rates down. This would certainly bolster the real estate market.  Keep in mind that ending the conflict would not necessarily mean an immediate return to the levels we witnessed at the beginning of the year. As we saw at the end of the pandemic-induced recession, shipping and other snarls do not disappear overnight. But progress in that direction would be a very welcome phenomenon. Even if the conflict stays in a muted stalemate we have seen over the past several weeks, this could help the real estate and several other markets to normalize — hopefully.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued to rise last week. There continues to be a lot of volatility due to the lack of Iran conflict peace progress contributing to elevated inflation numbers. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.51% last week from 6.36% the previous week. In addition, 15-year loans also increased to 5.85%. A year ago, 30-year fixed rates averaged 6.86%, 0.35% higher than today. The good news is that demand for homes seems to be holding up despite the increase in rates as pending home sales rose last month according to the National Association of Realtors®. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

America’s housing story is always changing, not just through market forces, but also through people’s choices. Over the past decade, the nation has added about 10.7 million single-family homes. However, the number of single-family rentals has declined, from 15.2 million to 14.4 million. As a result, the share of single-family homes being rented has fallen from roughly one in five to about one in six. This shows that while America continues to build homes and add households, a smaller share of those homes end up in the rental market. This is because many landlords have sold to owner-occupants, and the surge of apartment buildings being built has given renters more options elsewhere. After peaking near 19% in 2014, the share of single-family rentals has gradually decreased, stabilizing around 15.8% since 2023.  Renting a single-family home remains most common in some local markets, for example in college towns strong housing demand from students and newcomers keeps the single-family rental market outperforming even alongside plenty of apartment buildings.  Patterns show that the geography of single-family rentals mirrors that of America’s housing. In markets dominated by single-family homes, renting them is simply part of the composition of their housing stock. And, in fast-growing, more affordable metros, rising rental shares reflect sustained housing demand.  Source: The National Association of Realtors

The 2026 ServiceLink State of Homebuying Report unveils a deep look into the psychology of today’s homebuyers, uncovering their biggest stressors, time pressures, economic uncertainties and ever-growing reliance on digital tools. “Between the paperwork, negotiations, securing a good rate and figuring out what the price of homeownership will actually cost them, today’s homebuyers are telling us that they are overwhelmed,” said Dave Steinmetz, president, origination services. “Many are being forced to compromise, stretching beyond their budgets yet still not getting everything they want in a home. Instead, they are craving ease, value, transparency and long-term reliability. Recognizing these needs can help lenders make meaningful shifts to streamline their processes to get them a competitive edge, meeting today’s buyers where they are.” Across the key findings, a consistent picture emerges: Today’s buyers are stressed, time-strapped, inventive and digitally fluent, yet they’re also driven by a strong desire for simplicity, affordability, clear communication and long-term stability. These traits shape how they budget, what they compromise on, how they use technology and what they expect from lenders throughout the process.  The most stressful part of the process is the home price offer and negotiation (19%), followed by understanding all of the paperwork (15%), the closing process (12%) and securing a good mortgage rate (12%) – all pointing to opportunities for lenders to provide resources and education along the way.  To simplify the process, today’s buyers want to make the closing as easy as possible. For 39% of respondents, they would prefer to close on a future home purchase at their home or another location of their choosing, while 29% would prefer to close at a bank branch with a banker and 22% would like a fully virtual closing.  Source: Yahoo Finance

Rent growth has slowed. But for millions of American renters, that is not the same as relief. The monthly payment is what matters to renters, not the rate at which it increased, and by that measure 2024 was another year moving in the wrong direction. The number of cost-burdened renter households rose to 21.4 million in 2024, up from 20.9 million the year before. That means that 47.6% of renter households nationwide spent more than 30% of their income on rent. Severely burdened households, defined as those spending more than half their income on rent, climbed to 10.9 million from 10.5 million.  Slower rent growth does not mean rents are falling. It means rents are still rising, just less rapidly than before. That distinction matters for rent burdens. Households feel the level of rent they have to pay, not just the current growth rate. Even if rent growth slows, affordability can still be a challenge when rents remain high relative to incomes.  The cross-metro differences tell an important part of the story. Higher-rent metros do not just have higher rents, they also tend to have more renter households. That composition effect helps explain why there are more cost-burdened households in expensive markets.  In practice, both forces are at work. In expensive metros, renter households often face higher rents, and renter households make up a larger share of all households. That combination produces much larger metro-to-metro differences in the share of households experiencing rent stress.  Source: Zillow