Editor’s note: Econ Review is a roundup of the housing and economic market data reports released during the month.
As we move into summer and prepare to see the compounded data of the first half of 2026, the picture the housing market and economy paint is that of continued complications. While some indicators remain better historically and some facets are seeing improvement, the challenge of the Iranian conflict continues to cast a shadow over any sustained change in the state of real estate.
Here are some highlights from the housing and economic data that hit the news during June:
Home sales
Excitement sparked in the industry when the increase in pending home sales from April turned into a boost for existing-home sales in May. Sales grew 3.2% to a rate of 4.17 million, with NAR Chief Economist Lawrence Yun noting that this was the “highest level since December.” He also noted that the new “record high” reflects “solid fundamentals for homeowners and ongoing supply constraints.”
Additionally, the existing-home sales report saw inventory grow for the fourth consecutive month and affordability improve year-over-year once again, all good signs for more activity to come.
New-home sales were not as positive, however, as the effects of inflation and tariffs continue to weigh on the housing construction industry and make new home prices out of reach for many consumers. Sales were down 7.3% to a rate of 580,000, as the industry faces a “challenging market of increased costs that make delivering affordably-priced inventory difficult,” as characterized at the time by Realtor.com® Senior Economist Joel Berner.
The National Association of Home Builders (NAHB) Assistant VP for Forecasting and Analysis Danushka Nanayakkara-Skillington explained that for improvement in new-home sales, there needs to be “sustained reduction in financing costs,” potentially through legislation such as the pending 21st Century ROAD to Housing Act.
As for the potential of activity ahead, pending home sales saw another increase of 3.8% as what economists describe as “pent-up demand” may be beginning to release.
Yun explained that “a late spring buyer rush—even with mortgage rates not budging—is an indication of pent-up housing demand and consumers’ acceptance of above-6% mortgage rates as the new normal.”
Economists stressed throughout the report that bringing the Iranian conflict to an end (which was on the table at the time, now the waters are more murky) would definitely assist the housing market.
Home prices
Home-price growth saw very little movement in the latest data, called “essentially flat” by Nicholas Godec, head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices. The Case-Shiller Index saw home prices grow 0.8% year-over-year, a very slight uptick from 0.7% the month prior. Godec also noted that “home values have now declined in real terms for an 11th straight month.” Month-over-month the index actually observed a 0.1% fall after seasonal adjustment.
Despite continued challenges to the market, Realtor.com Senior Economist Anthony Smith noted in the report that “listing prices have fallen year-over-year for seven straight months, inventory is running above year-ago levels in many markets, and affordability has continued to subtly improve as incomes outpace home-price gains.”
Continued increases in inventory are expected to help modestly address affordability issues in the coming months.
Housing construction
As mentioned above, the housing construction industry still faces significant challenges due to affordability and supply chain restraints.
Due to these continued challenges, housing starts in the latest New Residential Construction report bottomed out to a six-year low. Starts fell a whopping 15.4% to a rate of 1,177,000, also down 8.7% year-over-year. Housing completions were also down in the report, falling 8.1% month-over-month and 14.2% year-over-year to a rate of 1,313,000.
The “brighter” spot of the report was permit data, as the falls month-over-month and year-over-year were significantly smaller (0.7% and 0.2%, respectively). Single-family permits were up monthly and multifamily permits were up yearly. Additionally, permits were also up month-over-month and year-over-year across the Northeast, the South and the West.
As construction reports continue to remain in more negative territory, so does homebuilder confidence. Builder confidence fell two points to 35, the 14th straight month it has remained below 40, a streak not seen since 2011-2012 during the foreclosure crisis.
“With the nation short about 1.2 million homes, builder sentiment will remain soft until barriers are eased and conditions improve for homebuilding,” said NAHB Chairman Bill Owens in a statement. “Congress can help by passing the major housing package now before the Senate, along with the CONSTRUCTS Act to address the construction labor shortage and the Energy Choice Act to prevent state and local bans on natural gas in new homes.”
The overall economy
As the Iranian conflict persists, the economy has faced continued headwinds from elevated inflation. Eyes were on economic reports this month ahead of the Federal Reserve’s Open Market Committee (FOMC) meeting as the potential of an interest rate increase was left on the table after the last meeting.
Annual inflation in the Consumer Price Index (CPI) clocked in at 4.2%, the “highest headline CPI reading in three years,” as noted in the report by Realtor.com Senior Economist Jake Krimmel.
The energy index has been the main cause of increases, due to rising oil prices from the Iranian conflict. In the CPI, the energy index saw a rise of 3.9% in May, following a 3.8% rise in April and 10.9% in March, and is now up 23.5% over the last 12 months.
Looking at the Fed’s favored inflation measure—the Personal Consumption Expenditures (PCE) price index—annual inflation clocked in at 4.1%. Navy Federal Credit Union Chief Economist Heather Long noted that this was the highest inflation in three years. Core inflation (without food and energy) clocked in at 3.4%, which Long noted was the “highest since Fall 2023,” and said was “painful for the middle-class and moderate-income Americans.”
On the other hand, the labor market has been in a better state, a good sign for the Fed. The Jobs report saw 172,000 jobs added, “well above forecasts ranging from 85,000 to 110,000,” as noted by Krimmel. This follows April’s strong performance of 115,000 jobs, now upwardly revised to 179,000.
Yun added that the “upward revisions to the prior months’ data show cumulative job gains of 565,000 over a three-month period—among the strongest in recent years.”
With all the indicators on the table, the FOMC decided to once again hold rates steady and maintain the “wait-and-see” approach, citing solid economic activity.
Kevin Warsh, the newly appointed Fed chair, said that the committee “agreed (forward guidance) was not well-suited to the current policy conjuncture” as he plans some significant changes to how the Fed communicates its decisions and processes data.
Consumer outlook has taken a more positive turn lately, with both consumer confidence and consumer sentiment recording increases. A bit of a tick down in oil prices helped consumers feel some relief across both reports, inching outlooks upward. However, both reports still remain challenged as the overall economy continues to face headwinds.
Looking ahead, the Leading Economic Index (LEI)—which provides an early indication of significant turning points in the business cycle and where the economy is heading—increased slightly by 0.1%. The increase was “fueled entirely by positive contributions from financial components, especially stock prices and the interest rate spread,” said Justyna Zabinska-La Monica, senior manager, Business Cycle Indicators, at The Conference Board.
Despite a better report this month, the LEI’s six- and 12-month growth rates were still negative, suggesting slower economic expansion ahead.
