What To Expect from the Housing Market in the Second Half of 2026

The first half of 2026 tested patience. Mortgage rates stayed higher than most buyers wanted. Affordability stayed tight. Overseas conflict added a layer of uncertainty nobody had priced in at the start of the year. The question now is not whether the first half was hard. It is whether the second half looks any different.

Nobody has a reliable forecast for interest rates or home prices six months out. But there are three signals worth tracking, because each one moves the market in a specific, traceable way rather than a general hope that things improve.

Mortgage Rates: Watch Oil, Not Just the Headlines

Mortgage rates have stayed elevated in large part because inflation has stayed elevated, and energy prices are a meaningful piece of that. Mortgage rates and oil prices, as tracked by Mortgage News Daily, have tended to move together over time. Both climbed when the overseas conflict began earlier this year.

Oil prices have started coming back down, and the U.S. Energy Information Administration is forecasting more of the same. If that forecast holds, and inflation cools alongside it, mortgage rates have room to ease in the second half of the year. None of that is guaranteed. It is, however, a specific and checkable chain of cause and effect, which is more useful to a buyer or seller than a general prediction that rates will fall because everyone wants them to.

Home Prices: Still Rising, Just More Slowly

A lot of buyers are hoping prices drop. Most forecasts do not support that. Federal Housing Finance Agency data shows prices up roughly 1.7% nationally year over year as of the most recent reading. The average forecast across major housing economists, compiled by Realtor.com and Fannie Mae, calls for about 2.3% growth for all of 2026.

For that average to hold, price growth has to pick up somewhat in the second half of the year. That is plausible for a specific reason: growth in the number of homes for sale appears to be slowing, and if mortgage rates ease even modestly, more buyers will compete for that same, more slowly growing pool of listings. More competition for limited supply puts upward pressure on price, not downward.

That has a direct implication for buyers waiting for a discount. Waiting for lower rates and waiting for lower prices are not the same bet, and the national data right now favors one of those over the other. For sellers who have been nervous about their home’s value, the national data is not the headwind it might feel like.

Sales Pace: Demand Did Not Disappear, It Deferred

Home sales have been slower than expected this year, which some have read as a sign that demand dried up. The data tells a different story. People who need to move for a job, a family change, or a life event have not stopped needing to move. Many have simply been waiting for more certainty on rates and affordability before acting.

Odeta Kushi, Deputy Chief Economist at First American, put it this way: “Overall, we expect pent-up demand to continue emerging gradually. But the pace of recovery will vary significantly across markets and will depend on the path of rates, labor market conditions and inventory growth.”

Census Bureau and National Association of Realtors data show what it would take to hit the sales totals forecasters currently expect for 2026: every remaining month of the year would need to come close to matching May, the strongest month so far. That is a meaningful bar to clear. It is also the clearest sign that economists are expecting more momentum in the back half of the year, not less.

What This Actually Means for a Decision

None of these three signals is a prediction. They are conditions worth checking before deciding whether to act now or wait. Rates depend on oil and inflation cooling together, not separately. Price growth depends on inventory growth slowing while demand holds. Sales pace depends on buyers who have been sitting out finally reengaging.

If those three things move in the direction the data currently points, the second half of the year looks different from the one that frustrated buyers and sellers earlier in 2026. If they do not, the caution that defined the first half will likely continue. Watching the leading indicators, rather than waiting for a headline that confirms the change has already happened, is the more useful strategy either way. That is the kind of read Munkel Real Estate Solutions applies to national data before translating it into a plan for a specific buyer or seller: not just what a forecast says, but what has to happen underneath it for the forecast to be right.

Bottom Line

The second half of 2026 will not fix every problem buyers and sellers ran into during the first half. But the underlying signals, oil prices, inventory growth, and pent-up demand, all point toward a market that could move rather than stall. That is worth tracking closely over the next several months.

Source: Data from the U.S. Energy Information Administration, Mortgage News Daily, the Federal Housing Finance Agency, Realtor.com, Fannie Mae, the U.S. Census Bureau, the National Association of Realtors, and First American.