Housing market shows strain on three fronts as sales stall, foreclosures climb and rents soften

Contract signings for existing homes fell 5.4% in June from May and slipped 0.3% from a year earlier, in a sign that the housing market remains stuck even as summer, typically the busiest season for transactions, gets underway.

All four major US regions saw month-over-month declines, though the Northeast and Midwest still posted small annual gains according to the National Association of Realtors.

"The highest mortgage rates in nearly a year and the record-high national median home price together are contributing to a tepid housing market that is especially difficult for first-time homebuyers," NAR chief economist Lawrence Yun said. "However, job gains can help support housing demand."

Yun cautioned against reading too much into contract data alone. "It is worth emphasizing that it is closing activity, not contract signings, that generates economic impact. Pending contracts are only suggestive of upcoming closed deals and do not align perfectly, due to fallout rates and contract contingencies."

Regionally, the Midwest logged the steepest monthly drop at 8.9%, followed by the West at 4.7% and the South at 4.1%. The Northeast fared best on a monthly basis, down just 3.0%. Some metro areas bucked the national trend entirely: Virginia Beach, Sacramento and Kansas City posted the largest annual increases in pending sales among the 50 biggest metros, each up more than 14%.

Foreclosures rise

Foreclosure activity, meanwhile, continued its climb. ATTOM's mid-year report counted 227,548 US properties with a foreclosure filing in the first half of 2026, up 21% from a year earlier and up 28% from two years ago.

Foreclosure starts rose 18% annually to 164,566, and completed foreclosures, or bank repossessions, jumped 33% to 27,983 properties. Idaho, Colorado, Georgia, North Carolina and Mississippi saw the sharpest annual increases in filings among states with meaningful volume.

"Foreclosure activity continued to increase in the first half of 2026, but the broader picture remains one of a market that is gradually returning to more typical patterns," ATTOM CEO Rob Barber said. "The combination of rising foreclosure starts, increased foreclosure completions, and shorter timelines points to a continued normalization of the foreclosure process, although the increases also suggest that some homeowners may be facing greater financial strain than they were a year ago."

The average foreclosure now takes 563 days to complete, the shortest span since 2013, down 13% from a year ago. Florida, South Carolina and Indiana carried the worst state-level foreclosure rates for the half.

Rental market

Meanwhile, Rentometer's mid-year data shows the national median asking rent for three-bedroom single-family homes held at $2,100, down 1.6% year over year, the first sustained national slowdown since the post-pandemic rental surge.

Rents stayed flat between the first and second quarters despite the usual spring leasing bump, as rising apartment and build-to-rent supply, along with a jump in landlord concessions, kept pricing power in check.

Nearly half of the 1,099 markets Rentometer tracked posted annual rent declines, with larger cities the weakest performers. The Pacific region saw the steepest regional drop at 3.2%, though San Francisco and San Jose stood out with rent growth above 5%, driven by renewed technology-sector hiring.