The US housing market is not freezing — and it's not booming. It's adapting. The week ending May 31 painted a picture of slow but steady movement, with mortgage rates hovering near their 2026 highs, buyer demand holding up better than expected, and builders cautiously gaining confidence.

Where mortgage rates stand

The 30-year conventional mortgage rate stood at 6.483% on May 29, a slight dip from 6.579% the prior week, per Optimal Blue data. That's still near yearly highs. HousingWire tracked rates at 6.65%–6.76% based on MBA data, with geopolitical volatility (including Iran tensions) and the 10-year Treasury yield pushing toward 4.6% keeping upward pressure.

The silver lining: mortgage spreads have improved significantly from their 2023 peaks. HousingWire analysts noted these spreads are "the only thing keeping rates under 7%." Without them, the current yield environment would have already pushed rates past that psychological threshold.

Buyer and seller behavior

Despite elevated rates, the market continues to move. Redfin reported pending home sales rose 7.7% year-over-year in the four weeks ending May 3 — the highest level since September 2022. NAR data showed a third consecutive monthly gain in April, with pending sales up 3.2% year-over-year.

The median sale price reached $396,173 in April, up 2.4% year-over-year — the strongest annual gain since March 2025, according to Redfin. Inventory stood at 1.48 million units, up 1.6% year-over-year, but still below the balanced range of 5–6 months of supply (currently at 4.4 months). Homes spent 49 days on market on average — 4 days more than a year ago.

The share of homes selling above list price dipped to 24.6%, down from 25.5% a year earlier — a subtle sign of cooling.

Builder sentiment inches up

The NAHB/Wells Fargo Housing Market Index rose 3 points to 37 in May, improving from 34 in April but still below the 50 threshold that separates optimism from pessimism. It was the 25th consecutive month below 50. Current sales conditions hit 40, future expectations reached 45, and buyer traffic stood at 25.

Notably, 32% of builders reported cutting prices (down from 36% in April), with an average reduction of 6%, while 61% used sales incentives — suggesting builders are finding ways to move inventory without aggressive discounting.

Housing starts in April ran at a seasonally adjusted annual rate of 1.465 million, down 2.8% from March but up 4.6% year-over-year. Single-family starts fell 9% month-over-month to 930,000, while multifamily construction picked up.

The bottom line

This week's data describes a market that's learned to live with higher rates. Demand isn't collapsing, inventory is slowly recovering, and builders are adapting with price cuts and incentives. But with mortgage rates stuck around 6.5% and Treasury yields showing no sign of a meaningful decline, the broader sentiment is one of a holding pattern — waiting for a clearer signal on where rates and the economy are headed next.