Economic Data Round-Up: A sluggish housing market constrained by affordability

US housing activity is likely to remain weak because high borrowing costs and poor affordability outweigh modest support from incomes and employment.

• Existing-home prices reached $440,600 in June, up 1.8% year on year, while new-home prices fell 2.7% to $398,300, showing that limited resale supply and weak new-home demand are producing different price dynamics.
• Affordability has improved somewhat, but mortgage payments remain above the long-run average burden of roughly 20.7%; the average 30-year mortgage rate rose to 6.7% and the 10-year Treasury yield stayed around 4.7%.
• Single-family existing-home sales rose 3.3% year on year in June to 3.73 million units, but sales remain historically weak, while new-home sales have trended lower on a three-month basis since January.
• Existing-home inventory growth slowed to 1.3% year on year in June from 2.0% in May and 6.8% at the start of the year, reflecting the mortgage lock-in effect; new homes instead had 9.5 months of supply, indicating weak demand and slower absorption.
• Rental supply is responding more visibly: multifamily construction surged in 2021–2023, record apartment deliveries occurred in 2024–2025, vacancies increased and rent growth slowed sharply.

Takeaway: A meaningful housing recovery requires a sustained decline in mortgage rates and improved affordability; investors should expect housing to remain a limited growth driver, with risks from higher-for-longer rates and labor-market deterioration.