The real estate groundhog is peaking out of his den just a tad, but it’s way too early to know whether he sees his shadow.
Right now, home builder confidence has ticked up a bit, as have pending home sales. But foreclosures are rising at a more rapid pace as homeowners drown under the cost of keeping a roof over their heads.
Even as builders are confronting the same affordability issues their customers face, their confidence in the market rose 1 point in March, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
More than a third of the builders responding to the monthly survey trimmed their prices in March, up slightly from February. The typical price drop was 6%, as it was the prior month. The use of sales incentives dropped a bit, too, but it was still the 12th straight month that at least 60% of all builders resorted to inducements to nail buyers.
On the existing home front, pending sales rose 1.8% month-to-month in February, the National Association of Realtors reported. But pending deals were down 0.8% year over year.
“The slight gain in pending contracts appears to be driven by improved affordability conditions,” commented NAR’s Chief Economist, Lawrence Yun. “However, those conditions could reverse if higher oil prices lead to an uptick in mortgage rates.”
As Yun sees it, the future depends not just on mortgage rates but also on job growth. And on that topic, the news is also a mixed bag. Though job gains have been sluggish in recent months, Yun noted, there are still 6 million more jobs in the country than in the pre-COVID period.
Pending home sales, of course, are a good leading indicator. But a good number of signed contracts never close. So the numbers have to be taken more lightly. Per Redfin, nearly 40,000 deals nationwide were canceled in January. That’s equal to 13.7% of homes that went under contract that month, and it’s the most on record for a January dating to 2017.
Applications for financing are another leading indicator. But they, too, have been flagging. The Mortgage Bankers Association reports that applications were down 10.9% in the week ended March 13. But the MBA’s unadjusted purchase Index increased 2% when compared with the previous week and was 12% higher than the same week one year ago.
“Mortgage rates continued to move higher, driven by increasing Treasury yields as the conflict in the Middle East kept oil prices elevated, along with the risk of a broader inflationary shock,” Joel Kan, the group’s chief economist, noted.
While the headlines focus on home buyers, those who have already done the deed are facing their own quieter, more systemic pressure to hold on. A new report from real estate data firm Benutech reveals that between January 2025 and January 2026, mortgage servicers filed more than 808,000 foreclosure-related documents.
To be sure, many of those cases will be cured by owners. But on a month-over-month basis, that’s an 11.6% jump in filings. Of the 808,147 records analyzed, the “Notice of Sale” was the most dominant document type, accounting for 365,359 filings. This indicates that a massive portion of the distressed market is no longer in the negotiation phase, Benutech reports. Rather, they are in the “final countdown.”
As the market moves deeper into 2026, the company is expecting liquidations to increase at “an accelerated pace.”
In its foreclosure report, though, data and analytics company ATTOM said there were 38,840 properties with foreclosure filings—default notices, scheduled auctions, or bank repossessions— in February. That’s down 4% from the previous month but up 20 percent from a year ago.
“While filings dipped slightly from January, both foreclosure starts and completed foreclosures remain higher than a year ago,” said ATTOM CEO Rob Barber. “Even with the continued rise, overall foreclosure levels remain well below historic norms.”
Foreclosures are likely to increase, too, and for the usual reasons – death of the breadwinner, divorce, and the loss of employment. But holding costs are rapidly increasing as well.
New data from Clever Real Estate shows that recent home buyers spent an average of $31,502 on home-buying expenses. That’s on top of their down payments, and more than four times what they expected to put out.
On average, Clever said, new owners can expect to spend $15,073 on maintenance and repairs during their initial year of ownership, $7,678 in concessions to the seller, $5,719 in closing costs, and $3,032 on moving. First-time buyers spend about 30% more than repeat buyers.
The costs were so overwhelming that a third of all buyers reduced their discretionary spending, depleted all or most of their savings or took on additional debt to keep from going under.
