US Housing Tracker | North America June 2026: Silent Starts Amid Continued Affordability Crunch

Research evidence excerpt

US Housing Tracker | North America June 2026: Silent Starts Amid Continued Affordability Crunch

Idea

June 22, 2026 03:57 PM GMT

Morgan Stanley & Co. LLCMUS Housing Tracker | North America James Egan

Strategist

June 2026: Silent Starts Amid James.F.Egan@MorganStanley.comMorgan Stanley India Company Private Limited+ +1 212 761-4715

Albert Tomy

StrategistContinued Affordability Crunch Albert.Tomy@morganstanley.com +91 22 6996-1866

New home sales are off to their worst start to the year in almost Morgan Stanley & Co. LLC

Henry Chen

Strategista decade. New homes available for sale remain at heights unseen

Henry.Chen@morganstanley.com +1 212 761-1146

since 2008. Against this backdrop, continued declines in single-

unit starts (down 7% YoY and 6% YTD) and softness in

homebuilder confidence seem here to stay.

Key Takeaways

Demand remains stagnant. Existing home sales are up 0.6% YTD while new home

sales (NHS) are down 7%, the weakest start to the year for NHS since 2017.

If we were looking for a (small) demand bright spot, it would be pending home

sales (PHS). PHS are up 2%Y for 3 straight months, a sign that existing sales

could continue to grind slightly higher from here in line with our forecast from

the 2026 Mid-Year Outlook.

Affordability should stay challenged near term. Income growth in recent months

has compensated for climbing mortgage rates, but a hawkish Fed has our Agency

MBS strategists moving tactically underweight the mortgage basis.

The pace of existing inventory growth has slowed, which should alleviate

pressure on national HPA in the months ahead. YoY HPA is down to +0.67%, we

expect it to finish the year at +2%.

A more granular look at HPA reveals that 36% of the 100 largest MSAs are

seeing home prices decline YoY, an improvement from 43% 8 months ago.