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If the first half of 2026 left you feeling a bit stuck in your moving plans, you’re definitely not alone. Affordability remained tight, mortgage rates crept higher, and global uncertainty added more pressure to an already cautious market. For many people, that created one big question:
Will the housing market improve in the second half of 2026?
No one can predict the market perfectly, but there are a few signs that the market could start moving in a better direction. Here’s what buyers, sellers, and homeowners should watch in the second half of 2026.
Will Mortgage Rates Finally Drop?
Mortgage rates have been one of the biggest reasons the market has felt stuck, and inflation has been keeping them high. A combination of higher energy prices and global uncertainty has kept inflation higher than ideal. However, there is some encouraging news on the horizon regarding oil prices.
Oil prices have begun to ease a bit, and while that might not seem directly related to buying a home, mortgage rates and oil prices historically tend to move in the same direction. For instance, both oil prices and mortgage rates increased in February when the conflicts overseas started. Despite the recent volatility, experts at the U.S. Energy Information Administration (EIA) predict oil prices will come down. With oil prices trending down, it’s possible that mortgage rates will do the same.
This is by no means a guarantee. But, if energy prices decrease, inflation cools, and overseas tensions ease, we could see mortgage rates come down in the second half of the year. For buyers, even a modest rate improvement could help with affordability. For sellers, lower rates could bring more buyers back into the market.
Home Prices Are Projected to Rise
Many buyers are hoping home prices will fall. In some local markets, prices may soften or dip slightly. But nationally, most forecasts still point to positive price growth for 2026. On average, experts are projecting an average price increase of 2.3% in 2026.
According to data from the Federal Housing Finance Agency (FHFA), prices are currently up about 1.7% nationally year-over-year. To reach the projected 2.3% average for the entire year, home price growth will need to pick up slightly during the second half of 2026.
Why might prices continue to rise?
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Inventory Shifts: The number of homes for sale has grown, but the pace of that growth may be starting to slow down.
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Returning Buyers: If mortgage rates improve, more buyers are likely to jump back into the market.
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Increased Competition: More competing buyers could put modest upward pressure on home prices, especially if housing inventory is not growing as quickly as demand.
For buyers, this means that waiting for a lower price later is not a guaranteed strategy. For sellers who have been worried about retaining their home’s equity, these projections are welcome news.
Expect Stronger Home Sales Volume
If the housing market has felt quieter than expected this year, it’s not your imagination. Home sales have been slower than many people hoped. But that doesn’t mean people have given up on moving.
Many hopeful buyers and sellers have simply been waiting for firmer market certainty, better affordability, or a clearer understanding of where real estate is headed. If mortgage rates ease and confidence improves, more people may decide it is time to move forward.
Odeta Kushi, Deputy Chief Economist at First American, explains the current market sentiment:
“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.”
To hit the forecasted 4.9 million home sales expected for 2026, the second half of the year will need to significantly outperform sales in the first half.
Essentially, every month for the rest of 2026 would need to match the momentum of May, which was the strongest month in the first half of the year. This indicates that experts anticipate much more market activity heading into the fall and winter.
The Bottom Line
The second half of 2026 might not be ideal, but conditions are pointing toward improvement. Mortgage rates may ease, home sales could accelerate, and property values are expected to continue rising at a steady, sustainable pace.
If you’re thinking about buying, selling, or relocating this year, connect with our brokerage team. We can help you understand local inventory, pricing, buyer demand, and what these 2026 housing market trends may mean for your plans.
