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By Giulia Carbonaro
Senior Reporter
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Two years after Donald Trump won a second term in the White House, voters are heading back to the polls for midterm elections which are largely seen as a referendum on his presidency.
When it comes to housing, an issue that remains top of mind for Americans after years of soaring costs, many are likely to feel “frustrated” by how little progress has been made to fix the country’s affordability crisis, experts say.
“The U.S. housing market is in hibernation,” Joel Berner, senior economist at real estate listing website Realtor.com, told Newsweek.
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“We’ve had several years of decades-low sales figures, which means two things. One, something has to change, and mortgage rates would likely have the most immediate impact,” he said. “Two, there is pent-up demand. Lots of would-be buyers who would’ve bought since 2023 are waiting to get into the game.”
The sluggishness of the market “leaves the American voter frustrated, and I expect that frustration will guide them,” Berner added.
Housing Is on Voters’ Mind, Whether It’s on the Ballot or Not
“Housing isn’t really a dividing line in this election. What we’re seeing instead is that it’s part of a much broader frustration about the cost of living,” Pete Carroll, executive vice president of Public Policy and Industry Relations at real estate data and analytics platform Cotality, told Newsweek.
“Voters are concerned about price inflation and the economy, and housing affordability is a big part of that.”
Two-thirds of U.S. adults (66 percent) say they are very concerned about housing costs, according to a survey released earlier this month by the Pew Research Center, including 76 percent of Democrats and Democratic-leaning independents and 53 percent of Republicans and Republican-leaning independents.
Another survey of 1,000 U.S. homeowners conducted by Hometap this month found that 77 percent say that a candidate’s platform to lower homeownership costs would affect their vote.
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“Housing is on the ballot across the country, both where there are specific measures being voted on and where candidates have made the subject a focal point,” Berner said.
The state of the housing market as the country approaches the midterms gives us a clear picture of Americans’ frustrations. By the end of last year, most experts predicted that 2026 will bring some improvement in affordability in the U.S. housing market, mainly driven by lower mortgage rates.
But “mortgage rates are the main reason that the 2026 housing market has underperformed our expectations,” Berner said.
“This time last year, we were in the middle of a sustained rate slide that we projected would continue through 2026. Rates even got below 6 percent for one week in late February before the conflict in Iran broke out,” he said.
Since then, rates have climbed back up above 7 percent. “The higher mortgage rates came just as the spring buying season was getting underway, and they continued pushing upward until September saw the lowest pace of pending home sales since 2001,” Berner said. As of October 22, the 30-year fixed-rate mortgage was 7.32 percent, according to Freddie Mac, up from 6.19 percent a year earlier.
“The housing market never got off the ground in 2026,” Berner said.
As of September, the latest month for which data is available, the existing-home median price for all housing types was $417,500 at the national level, according to the National Association of Realtors (NAR), up 1.3 percent from a year earlier, when it was $412,300.
While home prices are still rising, home sales continue falling. Last month, existing-home sales were down by 2.2 percent year-over-year, while total housing inventory reached 1.60 million units, up 1.9 percent from August and 4.6 percent from September 2025.
More homes are lingering on the market, putting a damper on home price growth, but not enough to stop it and reverse this trend. In the same month, affordability declined in three of the country’s four regions, according to NAR, with the Northeast, the area with the tightest inventory, reporting the biggest decline (-4.5 percent), followed by the Midwest (-3.1 percent), the South (-0.4 percent). Only in the West affordability improved (+1.0 percent).
Prices for new homes, on the other hand, have fallen to the point that they are often cheaper than older homes, forcing developers and builders to offer significant discounts and incentives to offload these properties.
The median new house price fell 3.9 percent year-over-year to $400,400 last month, according to the U.S. Census Bureau, due to a combination of low demand and developers offering hefty cuts. Despite these incentives, new home sales were down 5.3 percent year-over-year to a seasonally adjusted annualized rate of 676,000 units.
While developers and builders have slowed down on new construction, and the supply of new houses on the market fell to 476,000 units in September from 481,000 units in August, this U-turn is not enough to clear the glut of inventory in the market.
At September’s sales pace, it would take 8.4 months to clear the supply of new homes in the U.S., compared to 4.8 months for existing homes.
Pending home sales—which provide an early indication of future existing-home transactions, as they track signed contracts before closing—were down 7.3 percent month-over-month and 11.3 percent year-over-year in September, according to NAR.
According to Lawrence Yun, NAR chief economist, higher mortgage rates were behind this decline. “Although job growth and income gains can support home purchases, housing affordability is more affected by changes in mortgage rates,” he said in a statement.
“Given that mortgage rates have already risen much more than the Federal Reserve’s short-term interest rate hikes, mortgage rates could be topping out,” he said. “Despite the difficulty of obtaining a mortgage, the limited number of distressed properties is ensuring steady home prices. Buyers and sellers may simply be holding back until mortgage rates move favorably.”
How**’**s the Housing Market for Buyers And Sellers?
For buyers with “plenty of cash or home equity,” like many homeowners who have bought before the pandemic, now is an excellent time to get a good deal, according to Berner.
“Prices are falling, time on market is back to normal, and inventory continues to grow. The national market is tipping into buyers’ territory,” the economist said, listing all the ways buyers have gained more purchasing powers over the past year.
But even with this newfound advantage, buyers who rely on mortgages “are often struggling to find entry-level inventory that meets their needs and their budget,” Berner said.
“With a growing cost of living, saving for a down payment becomes more difficult, so first-time buyers end up financing more of their purchase at higher rates because of the current inflationary cycle,” he said.
For sellers, the current market is also tough.
“Many buyers have been priced out of the market by mortgage rates, and competition from other sellers is increasing,” Berner said.
Builders and developers are not faring much better, as they are “being squeezed on both sides from rising costs of land, materials, and labor as well as soft demand from buyers,” he added.
“They’re starting to pull back on starting new homes, but they continue to pull permits for new projects, so they hope the slowdown will be temporary. Investors are slowing down as well, they bought the fewest number of homes in the first half of 2026 that they had since 2020. Mortgage rates keeping would-be buyers on the sidelines has a wide impact.”
Contact Newsweek editors on this story: Tobias Meyjes and Emma Lee-Sang
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