Housing data flashes fresh affordability stress as rates hover near 6.6%

Two fresh housing reports showed the same pressure point for buyers and builders: homes are still expensive to buy, finance and construct. For everyday investors, that matters because housing touches mortgage lenders, homebuilders, materials suppliers, banks and consumer spending.

Pending home sales fell 5.4% in June from May, according to the National Association of Realtors. Pending sales track signed contracts on existing homes, which makes the data a timely read on buyer activity before deals close.

The NAR said pending sales were also 0.3% lower than in June 2025 and came in weaker than analysts had expected. Lawrence Yun, the group’s chief economist, said in a release that mortgage rates near their highest level in almost a year, combined with a record national median home price, are weighing on the market and making conditions especially hard for first-time buyers.

The mortgage math is straightforward. A higher mortgage rate raises the monthly payment on the same loan amount, which means a buyer may qualify for a smaller loan or need a lower home price to keep the payment affordable. When prices keep rising at the same time, the squeeze gets tighter.

Mortgage News Daily said the average rate on the 30-year fixed mortgage began June at 6.6% and ended the month at the same level. That rate had been as low as 5.99% at the end of February, according to the firm.

Demand for purchase loans has also softened. CNBC reported that mortgage applications to buy a home were 2% lower last week than in the same week a year earlier, even though rates were slightly higher at that point last year.

Builders are feeling the same squeeze

The pressure is not limited to buyers. The National Association of Home Builders said sentiment among single-family homebuilders fell to 34 in July from an upwardly revised 36 in June. In the NAHB index, a reading below 50 signals negative sentiment.

The index has stayed under 40 for 15 straight months, the longest stretch since 2012, according to the NAHB. Robert Dietz, the group’s chief economist, said in a release that affordability remains the industry’s main challenge, citing elevated mortgage rates, expensive land, higher materials costs and shortages of skilled labor.

Builders are using discounts and incentives to keep buyers engaged. The NAHB said 37% of builders cut prices in July, up from 35% in June and 32% in May. The share using sales incentives reached 63% in July, compared with 62% in June. That was the 16th consecutive month at or above 60%, according to the group.

Dietz also said recently enacted housing legislation from Congress could help expand supply by reducing red tape and speeding local permitting, while adding that more state and local policy changes are needed.

Existing-home prices are still climbing. The NAR said the median price hit a record in June, with limited housing supply keeping upward pressure on prices even as some local markets show weakness.

Peter Boockvar, chief investment officer of OnePoint BFG Wealth, wrote that housing remains a drag on the U.S. economy and cited NAHB estimates that the sector accounts for about 15% to 18% of the economy overall.

This story draws on original reporting from CNBC.