So far, the 2026 housing market hasn’t been all it was originally cracked up to be.
I’ve been covering the housing market for years, and although I’m disappointed that fewer people are buying homes right now, I’m also not at all surprised.
Stubbornly high mortgage rates. Home prices that are unrealistic for many buyers. A volatile geopolitical climate that affects the market in numerous ways.
These are all factors contributing to falling pending home sales, according to a Redfin report. In the four-week period ending July 12, pending sales in the United States dropped by 2.2%.
This marked the first pending home sales decline in a month.
“Data on home sales provides indicators about current housing demand,” Daryl Fairweather, chief economist at Redfin, told TheStreet. “When fewer homes are selling, buyers have more negotiating power, while indicating to sellers that they may need to lower their price or offer concessions to sell their home quickly.”
Fewer pending sales impact both homebuyers and sellers, just in different ways. And if the trends continue, there could be a longer-lasting affect on the real estate market.
Redfin clarifies that America is still a buyer’s market
America is still a buyer’s market, according to Redfin, meaning there are more homes for sale than people looking to buy.
But new listings are decreasing, too.
Week-over-week new home listings fell by 1.2%. This landed new listings at their lowest point since the beginning of 2026.
Sellers who don’t have to move are choosing to stay where they are due to low buyer demand. It doesn’t benefit them to list their houses only for it to sit on the market for a long time, which could result in a price cut or less negotiating power on their end.
Related: Fannie Mae predicts shift in mortgage rates, housing market
During the four-week period ending on July 12, there were 350,510 new listings. There were also 3.4 months of supply, which is down 0.2% year over year.
Months of supply refers to the amount of inventory divided by the rate of home sales. Redfin states a “balanced” number is four to five months of supply. A lower number typically indicates that it’s a seller’s market.
However, I’ll be the first to admit that the real estate market doesn’t always follow the “rules.” The low 3.4 months of supply might make it look like America is a seller’s market on paper, but in reality, we are more of a buyer’s market.
It’s just that fewer pending home sales hurts multiple facets of the housing market right now. Including inventory.
Fewer pending homes sales should help buyers
John Walkup, co-founder at UrbanDigs, homed in on the importance of pending sales versus closed sales. He explained that closed sales data is based on decisions buyers made months ago.
But pending sales data reveals more recent home-buying activity and is a better representation of how the housing market is performing currently.
That’s why Redfin’s updated numbers on pending sales data is so important. It helps us understand that current activity is slowing, even if we see other headlines that overall sales are up.
“So even if the ‘sales are still up this year’ narrative holds, the drop in pending deals suggests demand may be losing momentum below the surface,” Walkup told TheStreet. “For buyers, that means less competition and possibly more leverage. For sellers, it means days on market and no room for aspirational pricing.”
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“Lower home sales can be good for buyers if it’s a result of lower demand, especially in the short term,” Michael Weiner, a real estate agent at Coldwell Banker Warburg, told TheStreet. “Basic macroeconomics should result in lower prices from those who need to sell, especially in a local market.”
Homebuyers are in a sticky spot. On one hand, the main reason pending home sales are down is that affordability is so bad. High costs put homeownership out of reach for many Americans.
But if you can still afford a home, then lower pending home sales puts you in a better position and can save you money. When there’s less competition, you have more power to negotiate with the seller and face less competition with other buyers.
Low pending sales can be a win for homebuyers — but not all homebuyers can win in this situation.
What happens if long-term pending home sales stay low?
Fewer pending sales makes housing more affordable for buyers. So, if home sale numbers are low for a long time, prices should also stay low, right? Maybe home prices will even decrease.
Well, not necessarily.
“Widespread declines typically leave homebuilders to scale back capacity, leading to lower supply,” Weiner told TheStreet. “Lower supply also leads to more people staying in their current homes, even if they want to move, making it more expensive to buy the few homes available.”
“It can lead to a vicious circle in which entire markets could become nearly frozen, as most people stay in place if they can,” he said.
In a homebuyer’s perfect world, pending home sales wouldn’t spike — that would signal more competition, which could lead to bidding wars and higher sales prices. But neither would they continue to decline for months and months. That would make it difficult to find a home at all.
Buyers and sellers alike should keep an eye on upcoming pending home sales data. Redfin updates its housing market data every Thursday, and the company will post the next monthly update on August 10.
For information on your current housing market, talk to a local real estate agent. Pending home sales in your area may be higher or lower than the national data shows.
Knowledge about ongoing pending home sales trends can help homebuyers know what to expect as they begin house hunting. And it can help sellers decide whether to list their homes soon.
Related: Why mortgage rates are spiking again and what to do
