2026 Housing Market Forecast: What to Expect in the Second Half of the Year

If the first half of this year has left you feeling stuck, you're not the only one. Mortgage rates stayed higher than people wanted. Affordability remained tight. And uncertainty overseas added another layer of pressure nobody saw coming.

That's why so many people are asking the same question: Will the second half of the year be any better for the housing market?

While nobody has a crystal ball, there are a few encouraging signs things could start moving in a better direction. Here's what to watch.

Could Mortgage Rates Decline in the Second Half of 2026?

One of the biggest reasons mortgage rates haven't come down yet is inflation. And higher energy prices and uncertainty overseas are at least part of the reason inflation is still elevated. The encouraging news?

Oil prices have already started coming back down.

That may not sound like it has much to do with buying a home. But historically, oil prices and mortgage rates have often moved in the same general direction, although many factors influence mortgage rates.

Take a look at the graph below. Generally, they rise and fall together. Both went up in February when the conflict began. While there’s been some volatility lately, experts at the U.S. Energy Information Administration (EIA) say oil prices are forecast to come down. And since oil prices have been on an overall downward trend lately, mortgage rates could come down too:

It's too soon to say exactly when that will happen (or by how much they’ll fall), but if energy prices go down, inflation cools off, and tensions overseas ease, mortgage rates could come down in the second half of the year.

And that’s good news for anyone thinking about moving. The first half of the year tested everyone's patience. The second half may finally reward it.

What Housing Market Forecasts Suggest About Home Prices in 2026

A lot of people want home prices to fall too. But that’s not what most forecasts show.

While price trends are going to vary by area, and some places are seeing mild declines, experts still expect home prices to net positive this year at the national level.

In fact, they’re projecting prices will rise by an average of 2.3% in 2026 (see graph below):

What does that mean for you? Right now, Federal Housing Finance Agency (FHFA)data shows prices are up about 1.7% nationally year-over-year. The average forecast for all of 2026? 2.3%.

Based on those projections, home price growth would have to pick up a bit during the second half of the year. Nothing dramatic, just enough to finish the year around that projected 2.3% gain.

Here’s why that’s possible.

The number of homes for sale has grown, but that growth may be starting to slow down. And if rates improve, more buyers could jump back into the market. More buyers competing could put modest upward pressure on prices, especially if inventory’s not growing as fast.

That’s why buyers shouldn’t assume waiting will guarantee a lower price later. And for sellers, that’s great news if you’ve been worried about your home’s value.

What Housing Market Forecasts Suggest About Home Sales in the Second Half of 2026

If you've been wondering why the housing market has felt quieter lately, you're not imagining it. Home sales have been slower than many experts expected. But that doesn't mean people have stopped wanting to move.

A lot of people still want or need to make a change. They’ve just been waiting for more certainty, better affordability, or a clearer read on where the market is headed. And early signs show that may be on the horizon. 

If rates ease and confidence improves, more people may finally move. As Odeta Kushi, Deputy Chief Economist at First American, explains:

“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.” 

Based on the latest forecasts, to hit the number of sales expected this year, here’s what would have to happen. The second half of the year would need to outperform the first in sales (see graph below):

In fact, each month for the rest of 2026 would have to come close to matching the best month we've had so far this year (May). That’s a sign the experts are calling for more momentum headed into the second half.

More people will finally make their move happen – and you've got the chance to be one of them.

Bottom Line: What the 2026 Housing Market Forecast Could Mean for Buyers and Sellers

The second half of the year probably won't be perfect, but it could bring more opportunities than the first. Mortgage rates may ease, home sales could pick up, and many housing market forecasts continue to call for modest home price growth nationally. While no forecast is guaranteed, understanding current market trends can help you make more informed real estate decisions.

If you're planning to buy or sell a home in North County San Diego, it's important to understand how national forecasts compare to what's happening in your local market. Inventory, buyer demand, home prices, and mortgage rates can vary by community, making local market knowledge essential.

Because every housing market is different, understanding local conditions can be just as important as following national forecasts.

Whether you're buying your first home, selling your current property, or simply exploring your options, here are a few helpful resources:

• Find out what your North County San Diego home is worth with my Home Value Estimator.
• Search homes for sale in North County San Diego and explore the latest listings.
• View the latest North County San Diego Housing Market Snapshot for current market trends.
• Estimate your monthly payment with my Mortgage Calculator.
• Contact me if you'd like to discuss your real estate goals or have questions about today's housing market.

I'm always happy to help you better understand the North County San Diego real estate market and provide the latest local insights so you can make informed decisions with confidence.

About Patricia Villanueva, North County San Diego Real Estate Agent

Whether you're buying your first home, moving to a new neighborhood, downsizing, or selling your current property, working with a knowledgeable North County San Diego real estate agent can help you make informed decisions throughout the process.

Patricia Villanueva is a dedicated North County San Diego real estate agent who helps buyers and sellers navigate today's housing market with local expertise, current market insights, and personalized guidance. From understanding neighborhood trends and home values to developing effective buying and selling strategies, Patricia Villanueva is committed to helping clients make confident real estate decisions based on reliable market information.

Whether you're exploring homes for sale in North County San Diego, preparing to sell your home, or simply looking for trusted guidance, Patricia Villanueva is here to provide professional service tailored to your unique real estate goals.

Disclaimer: The information provided in this article is for general educational and informational purposes only and should not be considered financial, legal, tax, or investment advice. Housing market forecasts are based on publicly available data and projections from industry organizations and economists available at the time of publication. Market conditions, mortgage rates, home prices, and housing inventory can change over time, and actual results may differ from forecasts. Because real estate is local, market conditions can vary significantly by location. If you're considering buying or selling a home, consult with qualified professionals and review current local market data before making any real estate decisions.