Data offers ‘credible signal’ of returning homebuyer demand 

Despite ongoing geopolitical and economic turmoil, new data indicates the spring homebuying market didn't start off terribly — but it hasn't been a blockbuster season, either.

Contract signings, new listings up year-over-year: In a housing market progress report published May 21, Realtor.com used its "Market Clock" to assess new listings and contract signings in the 50 largest metros over the first four months of 2026. For contract signings in particular, 2026 was off to a better start than the three springs that preceded it but still trailed behind 2022, when mortgage interest rates first started rising from ultra-low pandemic-era levels.

New listings were also stronger in the first four months of 2026 than during the same time in 2023, 2024 and 2025, though this year was just barely ahead of last year's pace, according to Realtor.com's analysis.

"This matters because it's a credible signal that buyer demand and home sales may be finding their footing again," said Jake Krimmel, a senior economist at Realtor.com. While Krimmel noted that this should translate to a meaningful uptick in closed sales in May and June, the trend will have to overcome some strong headwinds to keep the momentum going.

Consumer sentiment dips again: One of those headwinds involves how consumers are feeling about the U.S. economy. According to the University of Michigan's latest survey, consumer sentiment hit another record low in May as concerns about inflation and the ongoing war in Iran persisted. In addition to elevated energy prices, the 30-year fixed-rate mortgage has climbed back above 6.5% after briefly dipping below 6% earlier this year.

"The promise-to-peril arc that defined the first four months of 2026 — early optimism, geopolitical shock, surprising resilience — is far from settled and likely won't be until there's some resolution in the Middle East," Krimmel said.

Fewer buyers backing out of deals: But contract cancellations slightly declined in April, according to Redfin data — another sign that demand is picking up.

Cancellations most often occur when buyers back out during the inspection phase. But in a buyers market, overall cancellations tend to rise due to sticker shock and the realization that more inventory allows buyers to be more choosy.

With a rate of 13.4%, cancellations in April dropped but were still running higher than the sellers market of 2020-2022.

"Buyers are generally committed because supply is tight enough that they're excited to find a home they love in their price range," said Timothy Hourigan, a Redfin Premier agent in Syracuse, New York. "In places like Syracuse, where homes are affordable compared to nearby big cities, bidding wars are more common than backing out."

More inventory helps: The spring housing market is seeing the biggest uptick in activity in areas where inventory is growing the fastest, according to Zillow data. Austin, Texas, led among major metros in annual sales growth (up 20%) and inventory over pre-pandemic norms (up 52%).

In a May 21 report, Zillow also found that inventory has fully recovered in 19 major metros, with gains concentrated in the South and West where sales growth is the strongest.

While overall inventory was up 3.7% in April compared to a year earlier, it remains 18.7% below historic norms, noted Orphe Divounguy, senior economist at Zillow. "The rising costs of everything else are one limiting factor, straining budgets and pausing major purchases," Divounguy wrote. "Inventory is another."