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US Housing Market Slumps for 13th Straight Month

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  Published in Business and Finance on Wednesday, January 14th 2026 at 12:52 GMT by New York Post

Wednesday, January 14th, 2026 - The US housing market continues to grapple with a prolonged slump, marking a concerning trend as 2025 drew to a close. Existing home sales have now fallen for a staggering 13 consecutive months, reaching levels not seen since 1995, a reality that paints a picture of constrained affordability and dampened buyer enthusiasm. While hopes for a recovery lingered, the market remains stubbornly resistant to a significant upturn.

According to the National Association of Realtors (NAR), the slowdown isn't a short-term blip but a persistent condition rooted in a confluence of factors. Chief Economist Lawrence Yun emphasized the lack of robust activity signaling a true rebound. The core issue, as Yun succinctly puts it, is affordability - a challenge that continues to impact both potential buyers and current homeowners.

The Dual Burden of High Rates and Elevated Prices

The current landscape is dominated by stubbornly high mortgage rates. The average 30-year fixed mortgage rate stands around 7.2%, a stark contrast to the historically low sub-3% rates witnessed in 2020 and 2021. This significant increase has effectively priced a considerable portion of the population out of the market, limiting demand and creating a frustrating barrier for aspiring homeowners. Simultaneously, while home prices have cooled from their pandemic-era peaks, they remain considerably above pre-pandemic levels. The median existing-home price reached $382,600 in December 2025, a figure that further compounds the affordability dilemma.

As Zillow economist Jeff Tucker explained, "It's a double whammy." Buyers are facing a difficult reality: higher borrowing costs coupled with elevated home prices, creating a particularly challenging environment for those seeking to enter the market or trade up.

A Slow Path to Recovery, Dependent on Fed Action

Industry experts anticipate a slow and gradual recovery for the housing market throughout 2026. The Federal Reserve's anticipated interest rate cuts are viewed as a potential source of relief, but the extent of their impact on mortgage rates and buyer sentiment remains uncertain. A direct correlation isn't guaranteed; lenders often factor in other economic indicators when setting rates. Further price adjustments are expected, but widespread predictions of a dramatic price correction are largely absent from mainstream forecasts.

"The market is likely to remain sluggish for the first half of 2026," Yun cautioned. "We'll need to see more substantial rate cuts and a softening of home prices to really get things moving again." The market's resilience depends heavily on these shifts, which are largely outside the direct control of individual buyers and sellers.

Supply Chain and Labor Headwinds Hinder Construction

One potential long-term solution lies in increasing housing supply. Some analysts are hoping that a surge in new construction will eventually alleviate the existing shortage and contribute to downward pressure on prices. However, the construction industry itself is facing its own set of hurdles. Ongoing supply chain disruptions and persistent labor shortages continue to hamper building activity, limiting the impact of new builds on the overall market. These issues, rooted in global economic complexities, further delay the potential for significant supply-side relief.

Ripple Effects Across the Economy

The prolonged housing market stagnation isn't confined to the real estate sector. It's sending ripples throughout the broader economy, impacting industries intricately linked to housing, including construction, real estate services, and mortgage lending. Reduced activity in these areas can lead to job losses, decreased investment, and a general slowdown in economic growth - highlighting the interconnectedness of the housing market with the overall financial health of the nation. As economists monitor the situation closely, the next few months will be critical in determining the direction of the housing market and its impact on the wider US economy.