Please see below, an article from EPIC Investment Partners which discusses the ongoing stagnation in the US housing market. Received today – 02/06/2026
The US housing market remains trapped in one of the most prolonged periods of stagnation in modern history. More than three years after activity collapsed in 2022, both new and existing home sales continue to languish near recessionary levels, leaving the market effectively paralysed.
The scale of the downturn is striking. New home sales have fallen 23.8% from their December 2021 peak of 816,000, while existing home sales have plunged 36.6% from their January 2022 high of 6.34 million. Since early 2023, transaction volumes have largely flatlined, defying traditional market dynamics and showing little sign of a sustained recovery.
What makes this standstill particularly unusual is that it has persisted despite a substantial decline in mortgage rates. Between October 2023 and March 2026, average mortgage rates fell around 2% from above 8%. Under normal circumstances, such easing in financing costs would unleash pent-up demand and reignite housing activity. Instead, new home sales declined by a further 7% during the same period.
The explanation lies in affordability. According to the Case-Shiller Home Price Index, home values have continued to climb to levels that overwhelm the benefit of lower borrowing costs. While mortgage payments may have become cheaper, the underlying cost of purchasing a home remains prohibitively high for many households.
This has created a crisis on both sides of the market. Prospective buyers are increasingly priced out by elevated home values, while existing homeowners remain reluctant to sell. Millions refinanced into mortgage rates near 3% during the pandemic and now face a steep financial penalty for moving. Selling would often mean replacing a low-cost mortgage with one carrying significantly higher monthly payments on a more expensive property.
These so-called “golden handcuffs” have severely constrained supply, reducing turnover and reinforcing the market’s paralysis. With fewer existing homes available, buyers face limited choice, while sellers remain locked into place.
Recent data suggest the pressure is mounting. Existing home sales remain weak, new home sales fell another 6.2% in May, and builders are grappling with rising inventories of unsold properties. Although national home prices recorded a modest month-on-month decline, the adjustment has been far too small to restore affordability or meaningfully stimulate demand.
The result is a housing market caught in a self-reinforcing cycle. Buyers cannot afford to enter, sellers cannot afford to move or leave, and transaction volumes remain stuck at historically depressed levels.
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Alexander James Roberts
2nd June 2026