[Spoilers] What happened to Steve?

There's a scene where the police turn up at Steve's house but I don't remember it being explained why. I assumed he either made a suicide attempt or snapped and tried to assault his dad. Then later on Harlon visits Steve's house and
the parents say "Steve's not here anymore." I thought that meant either Steve did actually kill himself, or was admitted to a psychiatric hospital.

The film implies suicide because Harlon has a hallucination of Steve shooting himself in the head, but after Harlon sees the cop cars at Steve's house, he then finds Steve who says he wished his dad let him keep the dog. Was that Steve supposed to be a hallucination too? Did I miss the part of the film where this was stated or is it meant to be ambiguous?