New data from Zillow and ATTOM points to mounting headwinds for buyers and sellers alike as spring momentum fades
The tentative rebound in US housing activity ran out of steam in May, according to data from two new reports.
Both sales and new listings retreated below year-ago levels as mortgage rates climbed, while a separate analysis of county-level risk data flags elevated vulnerability in parts of Florida and California driven by high unemployment and foreclosure activity.
Zillow's May Market Report shows the housing market losing momentum at what should be its busiest point in the calendar.
New listings, which typically reach their annual peak in May or June, edged down 0.8% from April and stood 4.1% lower than a year earlier. Sales volumes ticked up 4.8% month over month but remained 2.9% below last May's figures, undershooting the broader seasonal trend.
"May housing results were disappointing for those hanging on to hope of a stronger year for sales," said Mischa Fisher, chief economist at Zillow. "Inventory is rising, but weekly data suggests it could flatline in the next four weeks. A June peak for options home shoppers have to choose from would be early on the calendar, possibly foreshadowing slower sales in the second half of the year."
Nationwide inventory continued its long run of annual gains, extending a streak of 30 consecutive months of year-over-year growth, though the pace decelerated sharply to just 1% above last year's levels.
The typical US home value rose 0.6% month over month to $368,720. Combined with steadily climbing mortgage rates, that pushed the monthly payment on a typical purchase (assuming a 20% down payment and excluding taxes and insurance) to $1,861, up 1.1% from April. Despite that monthly increase, financing costs remain 3.1% below where they were a year ago.
Homes took a median of 18 days to go under contract in May, one day longer than both April and a year earlier. The share of listings carrying a price cut stood at 23.9%, compared with 25.7% a year ago. Just over 28% of homes sold above asking price in April, the most recent data available, down from 30.1% twelve months earlier.
On the rental side, the national typical rent reached $1,951, according to Zillow, a 2% annual gain and a 0.5% increase from April. Nearly 40% of rental listings on Zillow offered some form of concession in May, up from 35.1% a year ago.
Price decline risk
The softening demand picture takes on additional weight against ATTOM's first-quarter 2026 Housing Risk Report, which assessed vulnerability to price declines across 580 counties using four measures: foreclosure rates, underwater mortgage share, affordability relative to local wages, and unemployment.
Florida and California dominated the list of highest-risk markets. Of the 50 most vulnerable counties nationally, 12 were in Florida and nine in California, with five each in Illinois and New Jersey. The riskiest individual counties were Charlotte County, FL; Butte County, CA; Charles County, MD; Shasta County, CA; and Cumberland County, NJ.
"While home prices have eased slightly from last summer's record highs, affordability remains a challenge in much of the country," said Rob Barber, CEO of ATTOM. "The greatest risk remains in counties where unemployment rates are above 5 percent and homes are being foreclosed at greater rates."
The national median home sales price in the first quarter stood at $360,000, equating to roughly 30.3% of a typical worker's annual wages when accounting for standard monthly ownership expenses. The least affordable market in the analysis was Kings County, NY, where those costs would consume 108.6% of a median resident's wages. Santa Cruz County, CA came in at 97.1%, followed by Marin County, CA at 91.1%.
Underwater mortgages — where the outstanding loan balance exceeds the estimated property value by at least 25% — affected 3.2% of homes nationally. Louisiana counties accounted for the worst concentrations, led by Ouachita Parish at 17.4% and Calcasieu Parish at 17.1%.
Foreclosure activity nationally ran at roughly one filing for every 1,211 homes in the first quarter. The most acute stress was in Liberty County, TX, where the rate reached one in every 55 properties, followed by Baltimore City, MD at one in every 294.
On the employment front, the national unemployment rate was 4.4% in February. The worst readings among the counties surveyed were in California's agricultural belt: Imperial County led at 17.6%, followed by Yuma County, AZ at 11.7% and Tulare County, CA at 11.5%.
The least risky markets were concentrated in Tennessee, which had nine counties in the bottom 50, alongside Virginia and Wisconsin with five each. The safest individual counties were Chittenden County, VT; Rutherford County, TN; Arlington County, VA; Tippecanoe County, IN; and Cumberland County, ME — markets that benefited less from affordability advantages than from exceptionally low unemployment and foreclosure rates.
