The situation: The US housing market is in rough shape, as homes aren’t selling, yet prices keep climbing.

• In June—typically the spring peak—existing-home sales fell 2.7% MoM, while the median price hit a record $435,300, per the National Association of Realtors (NAR).
• This spring marked the weakest selling season since 2012, with just 1.39 million contracts signed from April to June, per Redfin. That was down 9.7% from last year, which was also a weak sales season.

Why it’s happening: A toxic mix of high home prices, elevated mortgage rates, and broader economic anxiety is freezing the market.

Inventory remains tight because most homeowners are locked into mortgage rates far below today’s 6.81% 30-year rate and are reluctant to give them up.

Locked-out buyers: First-time buyers are getting squeezed.

• Their median age rose to 38 last year, up from 35 in 2023, and their median household income climbed $26,000 in just two years—clear signs that entering the market has grown tougher, per NAR’s annual survey.
• That struggle helps explain why housing affordability tops the list of financial worries for nearly 1 in 5 (18%) Gen Zers, per a ThinkNow Research survey, as well as why many younger consumers are pulling back. Many younger buyers feel priced out entirely: Gen Z and millennial respondents say they’d need to earn $200,000 and $199,000, respectively, to feel financially comfortable, well above the $186,000 average across all age groups, per Bankrate.

Ripple effects: The stagnant housing market has been a drag on a wide range of retail sectors.

• Fewer new homeowners means fewer big renovation projects, weighing on home improvement chains like Home Depot, Lowe’s, and Sherwin-Williams, as well as specialty players like Floor & Decor and 3 Day Blinds.
• Furniture retailers like Pottery Barn and Crate & Barrel are also seeing weaker demand as fewer consumers move and redecorate.
• Electronics sellers such as Best Buy are affected too, with lower demand for TVs, speakers, and smart home devices.
• Major appliance and mattress purchases tend to be closely tied to moves—so when housing stalls, those categories suffer as well.

Our take: With transactions stalled and prices still climbing, the housing market offers little short-term relief. For retailers tethered to homeownership and moving cycles, that’s a stubborn headwind—especially as tariff costs rise and consumers grow more selective about their discretionary spend.

Retailers tied to housing can keep sales going by highlighting their affordable products as well as the long-term value of items like appliances and furniture.