The spring home-buying season hasn’t exactly been as robust as many people expected.
The average 30-year fixed mortgage rate hovered around 6.5% for weeks, according to Freddie Mac data. Both inventory and home sales have been down.
Real estate technology company Zillow has hope for the summer housing market, though.
The company released the Zillow June Market Report on July 7, and I perked up when I saw the optimistic tone of the headline and opening paragraphs.
Some have considered the 2026 home-buying season a wash, but we’re actually only a few weeks into summer. And Zillow’s data shows that the U.S. housing market shouldn’t be counted out just yet.
“Like a great novel, 2026 has been a rollercoaster of emotions in terms of setback and recovery,” wrote Mischa Fisher, chief economist for Zillow Group. “June’s chapter was pointedly more upbeat than May’s, with sales 5.9% higher than a year prior, and 9.2% higher than May.”
Zillow’s June housing inventory data rebounds
The Zillow May Market Report, released in early June, brought mostly bad news for homebuyers.
The report cast a light on just how big of a problem inventory is for the U.S. housing market. Annual new listings had decreased by 4.1%, and overall inventory was only up 1% year over year.
Housing shortage is the main reason behind the U.S. housing affordability crisis. Fewer available homes spurs competition among homebuyers, which then drives up the prices.
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For the most part, the June report delivered good news regarding inventory. Year-over-year new listings increased by 3%.
Unfortunately, overall annual housing inventory remained fairly flat again. It only increased by 0.9%. But even that disappointment came with some positive caveats.
Two noteworthy shifts took place for the first time since 2022. First, homes valued in the lowest 5% of the market had the most newly pending listings — an annual incline of 10.3%.
Second, active inventory for the lowest-value tier also grew faster than any other tier, with a 12.2% yearly increase.
I won’t deny that housing affordability continues to be a major national crisis. But it’s encouraging to see that more homes are available for the non-wealthy, and that eligible homebuyers seem to be taking advantage of this opportunity.
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Home value growth is cooling
Home values are still growing, according to Zillow’s June Report. This doesn’t surprise me — in my years of reporting on real estate, I’ve learned that with occasional exceptions, property values typically increase over time.
The encouraging news is that home values have barely inched up, according to the Zillow Home Value Index (ZHVI). Since June 2025, values are up by just 1.1%. The typical home value is $372,057.
The monthly payment toward the mortgage principal and interest on a typical home is also down 2.5% year over year, sitting at $1,884. This calculation assumes a 20% down payment.
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Typical home values have decreased in 22 of the 50 largest U.S. metro areas, according to Zillow. The cities with the largest year-over-year declines were Austin, Texas (-5.7%), Las Vegas (-3.2%), and Tampa (-2.8).
The cities with the largest annual increases in June were Milwaukee, Wisconsin (5.1%), Hartford, Connecticut (5.1%), and Buffalo, New York (4.6%).
More takeaways from the Zillow June Market Report
- Inventory is still too low. I do consider the availability of housing for lower-income buyers in June to be a win. However, inventory overall has effectively stalled, and low inventory is the primary reason behind the U.S. home affordability crisis.
- Homes sales have increased. In June, 381,125 homes were sold, according to preliminary Zillow data. (This number will be updated in mid-July.) The preliminary count is a 5.9% annual increase and 9.2% monthly increase, indicating that the housing market has become more active.
- Annual mortgage rates are down. Although Freddie Mac mortgage rates were around 6.5% in June, they were still more than 20 basis points lower than June 2025. This has resulted in lower housing costs and monthly mortgage payments than this time last year.
- A third of homes are selling above listing price. America may not be in a major seller’s market anymore, but plenty of houses are still going for above listing. The most recent Zillow data is from May, when 30.3% of properties sold for more than their original cost.
Source:Zillow
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