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Posted March 16, 2026 at 11:00 am
This week, the U.S. housing market has taken center stage with a flurry of data releases and a critical earnings report from homebuilder Lennar. Investors are closely watching the intersection of low inventory, shifting inflation dynamics, and a geopolitical shock that threatens to rewrite the 2026 economic playbook.
The week began with a sobering look at the supply-demand imbalance. On Tuesday, the National Association of Realtors (NAR) reported that Existing Home Sales for February ticked up 1.7% from January to a seasonally adjusted annual rate of 4.09 million units. While the monthly gain is a positive sign of life, sales remain down 1.4% year-over-year.1
NAR Chief Economist Lawrence Yun noted that while inventory is growing, it remains “sluggish.” The primary concern for the spring buying season is that if demand outpaces this slow supply growth, home prices will be forced higher, further eroding affordability for first-time buyers.
Earlier today, however, there was some positive news for the housing market. The U.S. Census Bureau’s report on Housing Starts showed new US residential construction improved for the third consecutive month to the fastest pace since February 2025. Housing starts increased 7.2% in January, to an annual pace of 1.49M homes. The increase was driven by a 29.1% surge in multifamily construction, while single-family homes continued to struggle.2 That’s good news for homebuilders, one of which reports earnings later today (LEN)! The overall sentiment from those names has remained negative amid continued worries about affordability and high construction costs.
Source: Econoday, Inc.
With existing homeowners locked in by low mortgage rates from years past, the burden of providing inventory has fallen on public homebuilders. Lennar is set to report Q1 2026 earnings later today, providing a crucial bellwether for the industry.
Analysts are looking for details on:
Upcoming homebuilder earnings announcements to watch for:
* Earnings date estimated based on historical reporting data.
The housing narrative is being complicated by a sudden double-whammy to U.S. inflation. While February’s Consumer Price Index (CPI) showed a steady 2.4% year-over-year increase, that data is now considered stale as it predates two major inflationary catalysts:
While the IEA has released 400 million barrels from strategic reserves, the market remains unconvinced that this will be enough to offset the loss of Middle Eastern supply if the conflict is prolonged, which seems likely given the news today that Iran will keep the Strait of Hormuz closed.4
On Friday, the US Bureau of Economic Analysis (BEA) will release the Personal Consumption Expenditures (PCE) price index. As the Federal Reserve’s preferred inflation metric, this would normally be the week’s most important data point. However, because of the 2025 government shutdown, the BEA is still playing catch-up; Friday’s report will reflect January’s data, predating both the new tariffs and the war.
The Federal Open Market Committee (FOMC) meets on March 17–18. While markets previously hoped for early rate cuts, the CME FedWatch Tool now suggests the Fed will remain on hold. Current projections suggest the first and only rate cut of 2026 will occur in October.5
As tax season arrives, many Americans are expecting larger tax refunds. These refunds are usually treated as windfall by consumers, often spent on clearing credit card debt from the holiday season or making large ticket purchases such as autos and appliances. However, this liquidity is unlikely to spark a housing boom. Instead, it may simply help households absorb the rising cost of living. The spike in gasoline prices acts as a stealth tax, diverting discretionary income away from savings for a down payment and towards essentials. Latest IRS data shows the average refund is up 10.6% thus from last year, based on data from the first four weeks of tax season.6
The U.S. housing market is currently trapped between a desperate need for supply and a deteriorating macroeconomic environment. While homebuilders like Lennar are the market’s best hope for inventory, they are facing a perfect storm of rising material costs due to tariffs and a wary consumer base hammered by persistent inflation. With the Federal Reserve likely to keep interest rates higher for longer to combat this new wave of inflation, the highly anticipated 2026 housing recovery may be delayed until the geopolitical and trade dust settles.
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Originally Posted on March 12, 2026 – Building Through the Chaos: Mixed Housing Data Amid Iran War and Tariff Turmoil
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