If you’re wondering where the housing market is headed for the rest of the year, you’re not alone. Many buyers and sellers are trying to make sense of changing mortgage rates, affordability challenges, and shifting market conditions before deciding whether now is the right time to make a move.
While forecasts for 2026 have changed since the start of the year, experts still expect opportunities for those buying a home or planning to sell. Understanding what has changed can help you make more confident decisions in today’s market.
If the housing market feels confusing right now, you’re not alone.
Mortgage rates have risen. Home sales haven’t picked up like expected. And many buyers and sellers are wondering when things are going to feel easier or be more affordable.
The truth is: a lot changed over the first half of this year.
The latest 2026 housing market forecast shows mortgage rates, home sales, and home price expectations have shifted compared to what experts projected at the end of last year.
Back at the end of 2025, economists were forecasting a much stronger housing market for 2026. They expected mortgage rates to come down, affordability to improve more dramatically, and home sales to rebound.
But lingering inflation, economic uncertainty, and growing geopolitical tensions overseas pushed mortgage rates higher than expected. And because rates stayed elevated for longer, many buyers continued to hold off.
That’s why experts recently revised their housing forecasts for the rest of the year (see graph below):
So, what does this actually mean for you? Let’s break it down.
Mortgage Rates May Remain Elevated
While just about everyone wants mortgage rates to go back to the uppers 5s or low 6s we saw at the start of the year, as of right now, the experts don’t think that’s likely to happen this year.
Instead, forecasts have been updated from the low 6s they originally projected. Many industry organizations are saying rates will stay in roughly the mid 6s this year. The good news is, that’s still lower than rates were a year ago.
Of course, this is based on what we know today. If the conflict overseas comes to an end or inflation drops, this could change. But if you’re waiting for lower rates, it may not pay off in the way you expect.
Existing Home Sales Revised Lower
Back in late 2025, experts expected we’d sell an average of 4.5 million homes this year. Now? That’s dropped down a bit to 4.2 million.
That tells us something important: buyers are still hesitant because affordability remains challenging.
Higher mortgage rates have made monthly payments harder to manage, especially for first-time buyers. And that’s slowed the pace of the market compared to what was originally expected. But even though the forecast was revised down, we’re still expected to sell more homes than last year.
Once geopolitical tensions resolve and rates begin to settle down, many experts believe that group of buyers will be ready to jump back in. As Lawrence Yun, Chief Economist at NAR, explains:
“There is sizable pent-up demand that could be released into the market.”
There has already been a few glimmers of renewed hope lately. In recent months, pending home sales have been improving month-over-month despite higher rates.
So, if you’re able to afford a home at today’s rates, it could still make sense to buy now. Because otherwise, if you wait, you’ll have more competition (and potentially fewer homes to choose from) when those other buyers jump back in.
New Home Sales Also Slowed
Builders also expected to have a stronger year. Earlier forecasts projected new home sales would top 700k in 2026. Now, economists expect we’ll be just shy of that number.
Again, mortgage rates are a major reason why.
But the upside for buyers is that builders may be even more motivated to sell. That means builder incentives, negotiation opportunities, and pricing flexibility may continue in many markets. So, if you live somewhere where there’s more new construction, this may actually be a bright spot for you.
Builders could be more ready to negotiate, and that gives you more leverage to get a better deal. This is especially true if you’re considering new construction.
Home Prices Are Still Expected To Rise
This is one of the most important takeaways from the entire forecast. Even though sales activity is slower, on average, experts did not revise their home price forecast downward.
They still expect prices to rise nationally this year.
Why? Because while buyer demand has softened, the number of homes for sale is still relatively limited overall. That imbalance is helping support prices, even in a slower market.
Of course, conditions vary depending on where you live. Some markets are cooling more than others. But nationally, experts are still projecting steady price growth — not a major decline. And that should be a comfort whether you’re buying or selling.
Because sellers don’t want a major drop in prices. And while buyers may think they do, generally you feel better about a big purchase when it doesn’t depreciate right away.
Bottom Line: Talk to a Local Real Estate Expert About Your Next Move
While housing market forecasts have been adjusted, the bigger picture remains the same: people are still buying a home, selling their house, and making moves based on their goals and life changes. Understanding how mortgage rates, inventory levels, and buyer demand may affect your plans can help you make more informed decisions.
Whether you’re thinking about buying a home, preparing to sell your house, or simply trying to understand current market conditions, connect with experienced real estate agents who can provide local market guidance and help you navigate your options with confidence.
If you want to know what’s happening in our local housing market, and what it could mean for your plans for the rest of this year, let’s connect.
