With the Federal Reserve scheduled to meet Wednesday, September 16, there is strong belief that they will vote to raise rates based on the most recent trends of strong hiring and the higher than acceptable inflation. This would be the first rate hike by the Fed since 2023.
Currently, mortgage rates are already high – 6.76% – which is the highest they’ve been in 15 months.
Well, maybe not temperature-wise for most of the country but the housing market certainly saw a lackluster month.
As usual, there was a mix of the positive and the not-so-positive. Median list prices declined for the tenth straight month but only by -1.3% year-over-year, roughly half from the drop in July. Price cuts were at 20.4%, the same as August 2025. This is the fist time in 2026 that cuts have matched last year’s levels.
Finally after eight straight months of year-over-year growth, pending sales saw a downturn for the first time since last November.
With mortgage rates continuing to climb and economic uncertainty everywhere you look, these are the ten hottest ZIP codes so far in 2026. The median list price is included.
Mortgage rates have climbed to 6.71%, the highest level since July 2025.
To add to the consternation of would-be buyers, home prices increased 1.5% annually in June, up from 1.2% in May.
Of course, inflation remains a persistent problem – will the Fed actually raise rates – and the ongoing economic uncertainty has brought the housing market to a near standstill.
While it’s estimated that the United States is still facing a shortage of up to 4 million housing units, a number of metro areas – primarily in the South – are busily constructing new homes that are affordable.
The top ten are here. The new construction share of current listings is included.
With one outlier (Stockton, CA), new construction is dominating the Southeast housing market (especially Florida) as out-of-metro buyers dominate the scene.
Drawn by affordability – many would-be buyers are from larger and more expensive metro areas. The top ten, based on the percentage of out-of-metro listing views. The median listing price is included.
While it seems like we’ve heard this before, apparently the continued increase in inventory and cool market are forcing sellers to be more realistic in their expectations right from the start.
The days of listing at 10% over comparable units are over. Brokers are reminding sellers that having a home sitting on the market for 60 days is not a reasonable strategy.
Some sellers are even pricing their homes at slightly below the current market rate and,, not surprisingly, their homes are moving the fastest.
A potential new policy – Proposition 37 – could theoretically allow California to save up to 17% on their home downpayment. With the median listing price of a home in California currently at approximately $778,000, this would require a downpayment of $156,000 at 20%, a number clearly out of the range of many California buyers. A 3% downpayment would be $23,000, certainly much more manageable.
While Prop 37 wouldn’t require the applicant to be a first-time buyer, it would stipulate that they be the first owner of the property, which is to stimulate much-needed housing development. An added benefit is that this proposition would allow buyers to avoid mortgage insurance, which is normally required for those putting down less than 20%.
Many analysts see this bill as benefiting California’s inland areas where land is less expensive and housing restrictions are less stringent.
Proposition 37 should be n the ballot for California voters later this year.
Yes, it is still generally cheaper to rent than to buy but that is changing as the median listing price of a starter home in the 50 main metros dropped 2.9% year over year while rents declined 1.4%.
These metro areas saw the biggest decrease in median list buying price as compared with rents.
With the explosion of AI, it’s no surprise that data centers over 50 megawatts have increased 7X since 2018 and there are now over 350 in U.S. communities.
Of course, all of this is not without controversy. Many states and cities are pushing back on data center developments and there is growing public concern over the heavy resource use – power and water – as well as disruptive noise and increased pollution.
More and more data centers are targeting rural areas with an average of 27 miles from a metro area, up from 23 miles in 2017.
Finally, what impact are data centers having on home prices. As of now, the effects seem to be negligible, but, as with all things related to AI. that could change quickly.