Oil prices, inflation fears, and mortgage rates are likely to remain elevated until the US/Iran conflict ends. But even today, mortgage rates are nearly a half a percentage point lower than they were at the same time last year, and many markets are significantly more buyer-friendly.

Surprising home price growth. Data provider Cotality (formerly CoreLogic) reported that national home prices had risen 0.4% month-over-month in March. That is surprising for a number of reasons. First, because (on its own numbers) prices had been negative-to-flat for the past 8 months. Second, because the US/Iran war started on February 27, leading to a jump in mortgage rates in March.

TP: Annualize the March MoM growth figure and you get 4.8%. That’s consistent with Cotality’s forecast for 5.1% price growth over the next 12 months. If we get anywhere close to that in 2026, it would represent a significant acceleration in price growth from ~1% in 2025.

New home sales picked up nicely. In March, new homes sold (seasonally-adjusted, annualized rate) rose 7.4% to month-over-month to 682,000 units. Still, that is only up 3.3% year-over-year, and the 6-month moving average for new homes sold remains stuck at 660K-690K (SAAR). As a reminder, back in October 2020 (COVID-driven housing boom), the figure peaked at 1.03 million. [Census Bureau]

TP: The media made a big deal out of the 5% MoM fall in median new home prices. But this is mostly a “mix” issue. More homes are being built/sold in the lower-priced South, and builders in general are delivering smaller homes that cost less. As you can see in the graph below, the share of homes sold in March 2026 that were priced below $500K (blue line) was 73%.

ADP: Modest job growth in April. ADP’s monthly employment report showed that private employers added 109K jobs in April. That was roughly in line with Wall Street estimates, but was lower than the 150K-160K implied by ADP’s own weekly “NER Pulse” data.

The majority of the job growth came from the Education/Health Services sector (+61K). Looking at the size of companies hiring, the majority came from Small Establishments (+65K). Annual wage growth for “Job Stayers” slowed slightly to 4.4%. Annual wage growth for “Job Changers” was steady at 6.6%.

“Because small firms are driving [the overall job growth[, the types of jobs we’re seeing are actually not full-time jobs. Small firm jobs growth comes with more part-time jobs, lower-paid jobs and people are working less [hours] in these new jobs…so we’re replacing jobs lost, but we’re replacing them with lower-paid, fewer-hours jobs.” — Nela Richardson, ADP’s Chief Economist, speaking on CNBC

Where is All That Housing Inventory?

Relative to their population, Florida and Texas continue to massively over-index for listings, while California significantly under-indexes. Florida has more than twice the listing share you’d expect given its population share, while California has half the listing share you expect given its population share. Looked at another way, Florida has 2.4X as many active listings as California, despite having only 78% of California’s population.

What this means is a lot of the inventory growth we’ve seen has come from two states, which doesn’t leave a lot of inventory left for the other 48. On a nationwide basis, active inventory in April 2026 was 12% below pre-pandemic (April 2019) levels. But if you strip out Florida and Texas, active inventory for the other 48 states were down 20% compared to pre-pandemic levels.

Inventory at the state level is an important predictor of home price trends
While the correlation has started to break down, it’s still generally the case that states that: 1) saw well above average home price growth during the pandemic, and 2) now have active inventory levels that are well above pre-pandemic levels, are seeing the most pricing pressure.

In April 2026, there were 15 states with active inventory above pre-pandemic (April 2019) levels, most notably:

Washington: +39%
Colorado: +38%
Tennessee: +36%
Texas: +32%
Utah: +20%

Notice anything about these states? They’re mostly in the Sun Belt and Mountain West. And in general, they’re the states that have seen the most home price pressure over the last few years.

Now let’s take a look at the states that never really saw an inventory rebound after COVID. There are 35 states with active inventory below pre-pandemic levels, most notably:

Connecticut: -75%
Illinois: -64%
Rhode Island: -64%
New Jersey: -61%
Vermont: -58%

Most of these states are in the Northeast or the Midwest. And in general, these are the states that have seen the most price increases over the last few years.

Bond and Mortgage Market

The bond market is watching the Middle East and oil prices, not domestic jobs data or real estate transaction volumes. If it looks like the US/Iran war could be coming to an end, bond prices rally (which mathematically lowers yields) because of lower expected inflation. In any case, the market is still not pricing in any rate cuts for the remainder of 2026 — even with the new guy (Kevin Warsh) in charge.

Note: The Fed Funds Rate policy range is currently 3.50–3.75%. The probabilities below come from the CME Group website and are implied from the Fed Funds Rate futures market.

• June 17 FOMC Meeting: This will be Kevin Warsh’s first meeting as the new Fed Chairman. 94% probability that the Fed Funds Rate will be kept at 3.50–3.75% (was 95% last week). That leaves only a 6% probability that rates will be 25 basis points lower than current.
• July 29 FOMC Meeting: 88% probability that the Fed Funds Rate will be kept at 3.50–3.75% (was 89% last week). A 12% probability that rates will be 25 basis points lower than current (implying a rate cut at either the June 17 or July 29 meetings, but not at both).
• No rate cut in 2026? If I look way out to the last FOMC meeting of the year (Dec 9), the market is pricing in a 72% probability (was 80% last week) that the Fed Funds Rate will be exactly where it is today. In other words, the market continues to price in NO rate cuts for the remainder of 2026.

They Said It

“The pandemic-era darlings of the South and Mountain West have seen most notable cooling as prices outpaced local paychecks. For example, Austin fell 15% from its mid 2022 peak, followed by a number of West Coast Florida markets, and Oakland, CA.

However, many of these regions have seen prices rise again in 2026. Austin is up about 2.5% since the start of the year, while Oakland is up almost 2%. Florida markets, however, continue to oscillate despite stabilizing. A jump in mortgage rates in March has once again rattled potential homebuyers.

Currently, Florida (-2.4%) and D.C. (-3.1%) have seen the largest correction over the last year. Meanwhile, the Northeast and Midwest remain leaders of the pack. States like Illinois and New Jersey are still seeing gains north of 5.5%, largely because for-sale inventories in those markets remain 50% below pre-pandemic levels, and they avoided the price spikes a few years ago.”
From Cotality’s latest Home Price Insights