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The Mid-Year Housing Market Update: Why Forecasts Changed in 2026

 

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. 

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 homes sale 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 others 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.

 

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.

*Who do you know who is thinking of selling or moving?*

‘Let It Bloom’ June Is One Landscaping Trend Homeowners Really Should Ignore This Summer 

By Anna Baluch 

June 2, 2026

Most homeowners appreciate well-manicured lawns. But the viral trend “Let It Bloom” June is trying to change that.

Its goal is to let wildflowers, native grasses, and pollinator-friendly plants steal the spotlight.

“Instead of clean-cut lawns and formal landscaping, this concept favors wilder, more organic appearances,” says Jonathan Ayala, a licensed real estate agent and founder of Hudson Condos in Hoboken, NJ.

READ MORE 

 

*Who do you know who is thinking of selling?*

Encinitas temporarily extends Coast Highway outdoor dining

City plans a permanent ordinance, and some structural changes, possibly later this year, By Barbara Henry 

The Encinitas City Council agreed Wednesday to continue allowing roadside outdoor dining areas along Coast Highway 101, but change eventually will be coming.

Expect the walls around these dining areas to get an upgrade and plan for new requirements regarding everything from stormwater runoff to rodent control, City Council members said. Also, they’re considering doing a new assessment of downtown parking generally to see what can be done to alleviate the reported shortage of spots.

Encinitas needs to “think outside the box” when it comes to parking, said Councilmember Marco San Antonio, who owns a sign-making business in downtown. “There are creative ways to do this.”

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Electric Bikes

New e-bike laws effective March 26, 2026

The Carlsbad City Council formally adopted new e-bike laws at its meeting on Tuesday, Feb. 24. The news laws are in effect as of March 26, 2026, starting with a 60-day warning period.

Here is what to expect:

• Anyone operating an e-bike must be at least 12 years old, as allowed by Assembly Bill 2234.
• When a minor breaks the rules and creates an immediate or substantial public safety risk, their e-bike may be impounded. The minor must complete an in-person safety course to retrieve the e-bike, and a parent or guardian must be present when the e-bike is released.
• The Police Department can also impound e-motorcycles, which are not street legal.
• E-bikes are prohibited at Poinsettia and Pine Avenue Community Parks.

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