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This spring, the U.S. housing market sent a mixed message. Interest in buying a home climbed sharply, yet the number of homes that actually sold barely moved. That gap sits at the center of a new analysis from Zillow Group, Inc. (NASDAQ: Z, NASDAQ: ZG), the Seattle company that runs the most visited real estate website and app in the country.
Zillow tracked what it calls engaged shoppers, meaning people who did more than scroll through photos. To count, a user had to save or share a listing for a home on the market, a small action that usually signals real intent. In the second quarter of 2026, there were 4.8 of these shoppers for every home listed nationwide, up 21.4% from a year earlier. Home sales, by comparison, rose just 4.5% over the same period.
What makes the jump notable is that buyers had more homes to choose from than they did a year ago. More inventory would normally spread interest more thinly. Instead, interest grew faster than supply. Zillow reads this as pent-up demand, meaning people who want to buy but are waiting for better conditions. Mortgage rates held at or below 6.5% heading into spring, and affordability was slightly better than a year before. Kara Ng, a senior economist at Zillow, described the season as a glimpse of how buyers behave when conditions improve even a little.
Location changes the picture dramatically. Buffalo, New York, led all major metros with 10.5 engaged shoppers per listing, followed by Providence at 9.5 and Hartford at 8.5. Years of underbuilding across much of the Northeast mean buyers there crowd around a thin supply. At the other end, Houston had just 2.2 engaged shoppers per listing, with Miami at 2.4 and San Antonio at 2.9. In much of the Sun Belt, a wave of new construction has given buyers more leverage and forced sellers to work harder for attention.
The data also shows a split by price. Luxury homes, defined as the top 5% of values in each region, drew a median of eight engaged shoppers per listing, compared with 2.7 for homes in the lower price tier. Interest in luxury homes grew 25.7% from the prior year, while interest in lower-priced homes rose only 8.6%. Homes with four or more bedrooms attracted nearly twice the interest of two-bedroom homes. Zillow links this to what it calls a K-shaped housing market, where wealthier buyers are better able to absorb today’s borrowing costs.
Since spring, conditions have tightened. Freddie Mac reported that the average 30-year fixed mortgage rate reached 6.95% in mid-September, up from 6.26% a year earlier. Mortgage rates tend to follow the 10-year Treasury yield, which hit 5.00% on September 18. Zillow’s August market report showed home sales down 0.6% from a year earlier, and the company now expects a weaker-than-anticipated finish to 2026. Molly Brooks of TD Securities told CNBC that mortgage rates could approach 8% if yields keep rising.
Homebuilders feel this pressure first. Yahoo Finance reported that shares of D.R. Horton, Inc. (NYSE: DHI) and Lennar Corporation (NYSE: LEN) have drifted lower in 2026, even as analysts point to underlying demand for roughly five million homes. PulteGroup, Inc. (NYSE: PHM) has been a modest exception, helped by its strength in Florida. Real estate investment trusts, which own or finance property and pay out most of their income to shareholders, face a similar squeeze. Higher long-term yields put pressure on housing and commercial real estate alike, and the spread between 2-year and 10-year Treasury yields fell to a one-year low in September, leaving mortgage REITs less room to profit.
The encouraging part of Zillow’s findings is that buyers have not walked away. They are saving listings, sharing them with partners, and waiting. If borrowing costs ease, that stored-up interest could turn into sales quickly. If yields keep climbing, the distance between wanting a home and buying one will likely keep growing, especially for first-time buyers shopping at the lower end of the market.
