The 2026 US housing market is on track to finish the year with little change in overall sales, modest price appreciation, and wide differences among local markets. Elevated mortgage rates remain the main constraint on demand, while limited resale supply continues to support prices in many areas.

Fannie Mae’s August 2026 housing forecast projects 4.74 million total home sales this year, down 0.3% from 2025. Within that total, existing-home sales are forecast to rise 0.7% to 4.11 million, while new single-family sales are expected to decline 6.9% to 632,000. The forecast also calls for 2.3% home-price growth in 2026 and an average 30-year fixed mortgage rate of 6.5%.

Those projections describe a market that is stable but restrained. They also suggest that agents should prepare for gradual changes in transaction volume rather than a rapid national recovery.

The construction outlook is mixed. Fannie Mae expects total housing starts to rise 1% to 1.37 million in 2026, but single-family starts to fall 3.9% to 904,000. Multifamily starts are projected to increase 12.1%. That split may add rental supply faster than for-sale inventory, leaving many markets with limited new-home competition even if overall construction rises.

July data show limited momentum

The latest sales figures broadly support that outlook. Existing-home sales fell 1.7% from June to a seasonally adjusted annual rate of 4.06 million in July, but were 0.7% higher than a year earlier, according to the National Association of Realtors’ July sales report.

Inventory totaled 1.54 million homes, down 1.9% from June and 0.6% from July 2025. The 4.6-month supply was unchanged both monthly and annually. Meanwhile, the median existing-home price rose 2% year over year to $434,100, marking the 37th consecutive month of annual price increases.

Forward-looking indicators were softer. Pending home sales declined 2.3% in July from the prior month and 2.2% from a year earlier. Contract signings fell in every region month over month and reached their lowest level since January 2026.

Affordability improves, but financing remains restrictive

Affordability improved compared with last year, although conditions remain difficult for many buyers. NAR’s Housing Affordability Index rose to 103.3 from 98.3 in July 2025. An index above 100 indicates that a family earning the median income has enough income to qualify for a mortgage on a median-priced home, based on NAR’s assumptions.

However, the national measure does not capture differences in down payments, debt, insurance costs, property taxes, or local prices. First-time buyers represented 29% of July transactions, down from 33% in June but slightly above 28% a year earlier. Cash buyers accounted for 26% of sales.

Mortgage rates are also limiting the supply of existing homes. Federal Housing Finance Agency research using data through the second quarter of 2024 found that each percentage point between a homeowner’s existing rate and the prevailing market rate reduced the probability of a sale by 18.1% on average. The findings are historical rather than a current count, but they help explain why some owners remain reluctant to trade a low-rate loan for a higher-cost mortgage.

Local conditions will determine the opportunity

National averages mask substantial regional variation. In July, median existing-home prices ranged from $342,900 in the Midwest to $622,200 in the West. Annual sales rose 2.1% in the Midwest and 1.4% in the West, while activity was flat in the Northeast and South.

For real estate professionals, the practical outlook is market-specific. Local months of supply, days on market, price reductions, and sale-to-list ratios will offer more useful guidance than national balance alone. Buyers may gain negotiating leverage where listings are lingering, but financing costs will continue to shape purchasing power. Sellers may still benefit from limited competition, although pricing strategy will depend on local demand and the cost of replacing an existing mortgage.