The first half of 2026 hasn’t been easy for the housing market.
Mortgage rates remained higher than many buyers hoped. Affordability challenges continued to limit purchasing power. And ongoing global uncertainty added another layer of hesitation for both buyers and sellers.
Naturally, many people are asking the same question:
Will the second half of 2026 be any better?
While no one can predict the future with certainty, several encouraging trends suggest the market may begin moving in a more positive direction. Here's what experts are watching.
Mortgage Rates May Finally Begin to Ease
Mortgage rates have remained elevated largely because inflation has stayed stubbornly high. One of the biggest contributors has been higher energy costs and continued economic uncertainty.
The encouraging news is that oil prices have recently started trending lower.
That matters more than many people realize.
Historically, mortgage rates and oil prices often move in the same general direction. According to the U.S. Energy Information Administration, oil prices are expected to continue moderating over the coming months.
If energy prices continue to decline, inflation cools, and broader economic conditions stabilize, mortgage rates could begin easing during the second half of the year.
No one knows exactly how quickly rates will fall, but even modest improvements could significantly improve affordability for buyers who have been waiting on the sidelines.
Home Prices Are Expected To Continue Growing—At a Healthier Pace
Many buyers continue hoping for major price declines.
However, that's not what most housing experts expect.
While local markets will continue to vary, national forecasts project home prices will finish 2026 approximately 2.3% higher than they began.
According to the Federal Housing Finance Agency, home prices have already increased roughly 1.7% year over year. That means modest appreciation is expected to continue through the remainder of the year.
Several factors support that outlook:
- Inventory growth appears to be slowing.
- Buyer demand could increase if mortgage rates improve.
- More competition among buyers may place gradual upward pressure on prices.
Rather than another period of explosive appreciation, experts expect a much healthier and more sustainable pace of growth.
For buyers, waiting may not necessarily lead to lower prices. For sellers, continued appreciation helps preserve home equity while supporting a balanced market.
More Buyers and Sellers Could Return to the Market
Although home sales have been quieter than expected this year, demand hasn't disappeared.
Many people still want—or need—to move. They've simply been waiting for greater certainty around mortgage rates, affordability, and overall market conditions.
According to First American Financial Corporation Deputy Chief Economist Odeta Kushi:
"Overall, we expect pent-up demand to continue emerging gradually."
If mortgage rates improve and consumer confidence strengthens, many of those delayed moves could finally happen.
Housing experts expect the second half of 2026 to generate stronger sales activity than the first half, signaling renewed momentum across many local markets.
While the recovery is expected to vary by region, overall market activity appears poised to improve.
Bottom Line
The second half of 2026 may not bring a dramatic shift overnight—but it does offer reasons for optimism.
Mortgage rates could gradually ease. Home sales are expected to pick up. And home prices are projected to continue rising at a healthy, sustainable pace.
For buyers and sellers alike, the months ahead may offer more opportunity than the first half of the year.
✨ Wondering what these market trends mean for your local area?
👉 Connect with a trusted local expert at https://aceestate.com/ and let's build a strategy tailored to your goals and today's market.
