By Shaina Mishkin
Summer will be here soon enough. As the days heat up, so are some parts of the housing market.
From a 40,000-foot view, this year looks like another disappointment for national home sales. Home prices largely remain high, as do mortgage rates when compared with pandemic lows.
"Poor affordability is keeping buyers on the sidelines while higher rates make homeowners hesitant to sell outside of demographics and necessity," TD Bank U.S. Economist Eli Nir, head of U.S. economics Oscar Munoz, and U.S. Rates Strategist Molly Brooks wrote in a recent note.
Sales don't have much room to grow this year, the team wrote. "We do not see significant room for acceleration in the housing market this year, while lower rates in 2027 could provide a slight boost."
But buyers are shaking off the blues in certain parts of the country, even if it doesn't move the needle much on a national level. Pending home sales, a data point that measures homes that go under contract well before the sale closes, perked up in April, rising 3.2% from the year prior, according to the National Association of Realtors.
Buyers and sellers are seeing the biggest differences compared with last year in West Palm Beach, which saw a near-40% increase in pending sales, Redfin data cataloguing the nation's largest metropolitan areas show. San Jose, Chicago, and Oakland, Calif., followed, according to the data.
Some previously lagging spots are turning around, according to Karl Mistry, the CEO of luxury builder Toll Brothers. He noted on a May 20 call with investors that both Austin and Florida have improved.
"Both of those markets might be seeing green shoots from all builders," the executive said on a Wednesday conference call. "But specifically, what we do and what we do well is performing better, and it's creating this contrast from our peers."
Business has gotten better for builders as a whole in Florida, Mistry noted -- but added that Toll Brothers benefits from building specifically in the luxury segment, where there are fewer competing bidders for land.
Austin, meanwhile, "is a market where the headlines certainly would lead you to believe it's soft," he said. "We've had an exceptional quarter, and really first half, in Austin."
Other parts of the nation that were strong for the builder included Las Vegas and Boise, Idaho, along with the coastal stretch from Boston to South Carolina, he said, while among the weaker geographies were Atlanta, San Antonio and Seattle.
Some of Toll Brothers' strength is derived from its focus on luxury homes -- a segment of buyers that usually isn't subject to the same economic winds as nonluxury shoppers.
But the broader pickup in pending listings should translate into more sales -- if the recent rise in mortgage rates doesn't throw a wrench in the works. Fixed 30-year mortgage rates rose to a recent 6.51% weekly average from as low as 5.98% in February, according to Freddie Mac.
Redfin's weekly data suggest that last week's surge in rates tamped down on demand. "Higher mortgage rates are scaring off some buyers, but that's opening the door for others," Chen Zhao, Redfin's head of economics research, said in a statement.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 26, 2026 03:00 ET (07:00 GMT)
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