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US housing market sends mixed signals as spring selling season begins

A glimmer of hope for buyers as rates drop—but will it revive the stagnant market? Renters finally catch a break after years of surging costs.

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2 min read
The image shows a row of colorful houses on the corner of a street, with cars parked on the side of...
The image shows a row of colorful houses on the corner of a street, with cars parked on the side of the road. There are trees, poles, boards, and a fence lining the street, and the sky is filled with clouds in the background. This image is representative of the new housing market in Baltimore, Maryland, which is expected to reach $1.5 million.

US housing market sends mixed signals as spring selling season begins

The US housing market is showing mixed signals as it enters the spring selling season. While mortgage rates have dipped below six per cent for the first time since early 2023, existing home sales remain near historic lows. At the same time, rents in major cities are beginning to stabilise or even decline after years of sharp increases. Mortgage rates have climbed steeply since the pandemic, more than doubling from the record lows below three per cent seen during Covid. By early 2026, the average 30-year rate briefly slipped under six per cent, offering some relief. Yet, the share of homeowners with mortgages at four per cent or lower has fallen to just over half, down to 50.6 per cent in the last quarter of 2025.

Existing home sales have struggled since 2023, running about 25 per cent below 2019 levels. The latest figures mark the weakest performance since 1995. Meanwhile, the rental market is shifting. A surge in multi-family construction and property conversions has pushed the national apartment vacancy rate to a record 7.4 per cent in early 2026. In cities like Cologne, listings show rents holding steady or dipping—one three-room flat in Neuehrenfeld currently advertises at €22.42 per square metre for cold rent.

Baby Boomers, who hold a significant portion of US residential real estate wealth, continue to shape the market. Housing and construction activity still accounts for roughly one-sixth of the country's GDP, underscoring the sector's economic weight. The spring market arrives with lower mortgage rates but persistent challenges. Home sales remain depressed, while rental prices in key metro areas show signs of easing. With high vacancy rates and shifting demographics, the housing sector faces a period of adjustment in the months ahead.

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