The US housing market is in a “twilight zone,” with starts rising but permits, completions, and builder confidence falling.
Builders keep breaking ground mainly because halting projects is costly, not due to strong demand, while cutting prices and offering incentives.
High mortgage rates near 6.7% freeze homeowners in place, limiting inventory and keeping demand muted, despite a 3.7M home shortage.
Resale activity is weak, prices stay high on tight supply, and Zillow forecasts a 1.7% national price decline through March 2026.
The outlook hinges on mortgage rates and permit rebounds—without them, today’s stall could slip into tomorrow’s downturn.
