Homes Sit on Market for Longest in Years | May 2026 Housing Market Update

**Dave Meyer** (0:00)
It is the middle of spring now, which is supposed to be the busiest, most active time for the housing market. A great time to sell a home. Lots of new inventory for those looking to buy. But this year hasn't been so straightforward. With rate volatility, geopolitical turmoil, and a general sense of economic uncertainty, the housing market isn't following its usual patterns. But that does not mean that it's all bad. In fact, there are a lot of silver linings emerging in the housing market that real estate investors should be paying attention to. And today, in our May housing market update, we're gonna make sure you understand exactly what's going on, what risks you should be avoiding, and what opportunities you should be looking for.
Hey everyone, welcome to the Bigger Pockets Podcast. I'm Dave Meyer, Chief Investment Officer at Bigger Pockets, housing market analyst, real estate investor for 16 years now.
Today, we are doing our monthly housing market update, and we have a lot to go over. The spring housing market is actually starting to shape up, at least a little bit, but it's different from previous, quote unquote, normal years in the housing market. And understanding how this is evolving for you can really be the difference between finding great opportunities and missing out. So we're going to dig into this all today. Specifically, we're going to take a look at the spring data, where the inventory is, what's going on with prices, where you can score a good deal, and where the markets are pretty risky.
Next, we're going to look at a new survey. This is new data we're understanding about homeowner behavior that I personally think is super interesting because it could shape the housing market for years to come. We're also going to get into rental data today, which we haven't talked about in a while, but is really going to impact performance of your existing portfolio and help you understand how you should be underwriting for any new deals you're looking at. And then, as we do every month, we'll look at our risk report, which is just talking about the stuff that really indicates if we're just in a normal correction or are we heading towards a potential crash. So we'll look at the foreclosure and delinquency data there. Make sure you're all up to date on that. That's the plan for today's episode. Let's get to it.
First and foremost, let's do our spring housing market update. What I think we're seeing big picture stuff here is that maybe homebuyers or investors aren't too sensitive to mortgage rates in this 6, 6.5% range. I myself was a little bit concerned when I saw rates spike back up, just that psychologically or emotionally people would be tired of this rates he saw and maybe would just take a step back from the housing market and wait and see where things went. But we're actually seeing that demand has remained strong.
There are a lot of different ways to measure this, right? You can look at this in terms of purchase applications. It's something we talk about a lot on the show. I track mortgage purchase applications and those are up 5% year over year. So despite everything going on, 5% more people are going out to lenders and applying for mortgages than a year ago.
So that's a little bit contrary, right? To what we hear in the media a lot or on social media that there are some buyers that no one wants to be in the housing market. Actually, at least in this way of measuring it, 5% more people want to be in the housing market than this time last year.
And that is not the only way to measure demand and all of them are kind of showing this trend. Google search volume, another way to look at this for homes for sale. If you just go and search that, that's at the highest level it's been in nine months and that's up 20% year over year, right? That's pretty significant.
And then, of course, sort of the most important stat here is pending sales. So if you haven't heard this data point, pending sales are just basically properties that were listed. They've now gone under contract to be purchased and they're just waiting to close. Those, I think, are the most important because it actually, it's not just applying or a Google search, it's people actually going out and signing a contract. Those are up 8% year over year and up a lot just over the last week. So to me, this is encouraging. When I'm saying that we're starting to see a little bit of a spring market, this is what I'm talking about. There is still demand in the market. We are seeing people not hypersensitive to this recent changes in mortgage rates. And although this is not going to be a year like 2019 or 2018, or certainly not like what was going on during the pandemic, we are not seeing a leg down. And I have said before, I was a bit concerned when the war in Iran started that we would see an even slower market. When we started the year, I thought we would see an uptick in home sales this year a little bit from 4 million, maybe to 4.1 million. But I was a little concerned when we saw the war in Iran start, that we would see a leg down. But that actually hasn't happened and we're staying consistent, at least with what we've seen over the last couple of years, still slow by historical standards. But the good news is that it's not getting worse and we are seeing some of the normal seasonality that we should expect in the market. And to me, that's good. That's good news.