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Here Come the HELOCs: Mortgages, Housing-Debt-to-Income-Ratio, Serious Delinquencies, and Foreclosures in Q2 2026
Why we keep an eye on the housing-debt-to-income ratio.
EconomyDebt & FinancingUnited States
Updated 3 days ago
Read The industry's own research.
23 reports
Why we keep an eye on the housing-debt-to-income ratio.
Mortgage rates at 6.69% are not high. Inflation is high.
But soaring imports (data-center components), a drop in federal government spending, and changes in private inventories ate into GDP growth.
The US added 1.51 million housing units (new construction minus demolitions) in 12 months, homes for 3.5 million people. The population grew by 757,000. And vacant housing units continued to surge.
Orders for computer & electronic products; electrical equipment & components; machinery incl. power generation equipment; fabricated metals products; and core capital goods – all surged.
In the South, inventory for sale was up 71% from 2019, while sales were down 8%. Homebuilders are very motivated to make deals.
Promising another morose summer in the housing market.
The gap between single-family rents and multifamily rents has widened massively. A look at 14 big markets.
In another 39 bigger cities, condo prices fell by 8% to 14%. A massive hangover after a historic Condo Bubble.
And 28 were down from their peaks in prior years, led by Austin -27% and Oakland -25%.
The first shock was due to the supply-chain chaos in 2021 through 2022. The second shock is now, it's huge, and it's due to the AI investment boom.
This is an economic update published by Wolf Street on July 16, 2026, reporting on U.S. retail sales activity excluding gas stations, noting a fifth consecutive month of increases, and discussing consumer spending patterns across online retail and vehicle dealerships relative to housing purchases.
This is a news article published by Wolf Street in July 2026 reporting on pending home sales data, noting a decline to near-record lows nationally with particular weakness in the West region, in the context of rising mortgage rates.
This is an economic update published by Wolf Street on July 15, 2026, reporting on producer price inflation metrics, specifically noting core PPI at 4.7% and services PPI at 4.6%.
This is a data and figures report published by Wolf Street in July 2026 examining the largest holders of US Treasury securities, including US hedge funds engaged in basis trading and US companies operating through overseas entities. The report covers national-level data on foreign and foreign-adjacent Treasury holdings.
The US government sold $743 billion in Treasury securities during one week in July 2026, comprising $612 billion in bills and $131 billion in notes and bonds, with the 30-year bond yield reaching 5.058%, the highest since 2007. The article attributes rising long-term yields to inflation running above 4%, expectations of future Federal Reserve rate hikes despite recent cuts, and market concerns about the volume of new Treasury supply that must find buyers at potentially higher yields.
Supply of existing single-family homes reached a 10-year high of 4.6 months in June 2026, while condo supply hit a 14-year high of 6.4 months, as sales of single-family homes fell 2.4% month-over-month to an annual rate of 3.73 million and condo sales fell 2.7% to a record low annual rate of 360,000. The 30-year fixed mortgage rate rose to 6.49%, and the national median single-family home price inched up 1.8% year-over-year to $446,400, with dramatic regional divergences including prices down 26% in Austin and up 5.1% in New York City.
The European Central Bank shed €149 billion of quantitative easing assets in the second quarter of 2026 and has reduced total QE assets by €3.7 trillion (52 percent) since mid-2022, bringing them down to €3.47 trillion, while simultaneously hiking policy rates to 2.25 percent and raising its inflation projection for end-2026 to 3 percent. The ECB also marked down its gold holdings by €160 billion in Q2 after a decline in gold prices expressed in euros, though the document notes that no adverse economic effects have resulted from the substantial balance sheet reduction.
The article examines existing home price changes across 19 of Europe's largest countries through Q1 2026 based on Eurostat transaction-based data, showing divergent regional trends with Portugal, Bulgaria, Slovakia, Hungary, and Spain leading in year-over-year gains of 13.5 to 19.7 percent, while Germany, France, Italy, Sweden, Austria, and Finland remain below previous peaks. Finland experienced the steepest decline at 16.8 percent from its Q2 2022 peak and has returned to 2010 price levels, whereas Hungary posted the largest cumulative gain since 2010 at 308 percent, followed by Portugal at 186 percent and Czechia at 171 percent.
The Bank of Japan has reduced its total assets by ¥116.9 trillion (15.6%) since Q1 2024 through quantitative tightening, bringing holdings to ¥639.6 trillion ($3.97 trillion) as of Q2 2026, the lowest level since Q1 2020, while pursuing this policy rather than aggressive interest rate increases to stabilize the yen and address import-driven inflation. Japanese government bond holdings declined ¥12.5 trillion in Q2 to ¥518.3 trillion, loan balances fell ¥9.7 trillion to ¥68.0 trillion, and the BOJ has begun selling equity ETFs and J-REITs at acquisition cost while allowing long-term bond yields to rise substantially, with the 30-year JGB yield reaching 4.0% and the 10-year yield reaching 2.7% despite maintaining policy rates at only 1.0%.
Nonfarm payrolls rose 57,000 jobs in June 2026 with the six-month average reaching 88,000, the highest in two years, while the labor force declined to 169.36 million amid a crackdown on illegal immigration and H-1B visa restrictions, resulting in a historically low 4.19% unemployment rate despite weak job demand. Employment gains across major industries showed healthcare and social assistance adding an average of 50,000 jobs over three months, while financial activities declined by 9,000 monthly on average due to real estate sector weakness, with prime-age labor force participation dropping to 83.3% in June as wage growth at 3.52% year-over-year lagged accelerating inflation at 4.2%.
The yen has fallen to a four-decade low of ¥162.8 per US dollar, declining 37% since 2021 and 53% since 2012, while Japanese Government Bond yields have surged to three-decade highs, with the 30-year yield at approximately 3.96% and the 10-year yield at 2.70%. The Bank of Japan's decades-long ultra-loose monetary policy, combined with only modest recent rate increases to 1.0% and quantitative tightening that has reduced its balance sheet by 12.6%, are described as insufficient to stabilize the currency or address resulting import-driven inflation and rising government borrowing costs.
Home prices fell from prior peaks in 28 of 33 major expensive U.S. cities tracked in May 2026, with the largest declines in Austin (-27%), Oakland (-26%), and New Orleans (-19%), while prices rose year-over-year in only eight cities, notably Chicago and New York City which reached new all-time highs, and San Francisco where AI-driven compensation packages created a "mansion shortage" effect that boosted mid-tier prices 7.8% year-over-year. The analysis attributes prior price spikes from mid-2020 to mid-2022—led by Austin (+62%), Phoenix (+60%), and Fort Worth (+50%)—to Federal Reserve monetary policies including near-zero mortgage rates through quantitative easing, which created the current affordability crisis.