By Rebecca “Reba” Haas, Team Reba — RE/MAX Metro Eastside | Serving Seattle, Bellevue, and the Puget Sound Region since 2003
Why does the housing market feel so confusing right now?
If you’ve been trying to make sense of the market lately, you’re not crazy and you’re not alone. I hear it every week from clients on the Eastside and across Puget Sound.
Here’s what’s actually going on: mortgage rates went up instead of down, home sales didn’t take off the way the experts promised, and a lot of buyers and sellers are sitting on their hands waiting for things to feel “easier.” The honest truth? A lot changed in just the first six months of this year, and the forecasts you may have read at the end of 2025 are already out of date.
Back in late 2025, economists were calling for a much stronger 2026. They expected mortgage rates to drop, affordability to improve, and home sales to bounce back. Then lingering inflation, economic uncertainty, and growing geopolitical tension overseas pushed rates higher than projected — and because rates stayed elevated longer than expected, a lot of buyers kept waiting. That’s the whole reason the experts recently revised their forecasts for the rest of the year.
So let’s break down what that revision actually means for you, whether you’re buying, selling, or just trying to time your next move.
Will mortgage rates come down in 2026?
Short answer: probably not as much as you’re hoping — at least not this year.
Just about everyone wants to see rates slide back to the upper 5s or low 6s we had at the start of the year. As of right now, the experts don’t think that’s in the cards for 2026. Forecasts that originally called for the low 6s have been bumped up to roughly the mid-6s for the remainder of the year.
Now, here’s the silver lining I always point clients to: that’s still lower than where rates were a year ago. And this is all based on what we know today. If the conflict overseas winds down or inflation cools off, the picture could shift. But if your whole plan is “I’ll wait for rates to drop,” I’d gently push back on that — it may not pay off the way you think, and you could end up competing with a flood of other buyers when they finally do move.
How many homes will actually sell this year?
Late last year, the experts expected about 4.5 million existing homes to sell in 2026. That number has since been revised down to about 4.2 million.
What does that tell us? Buyers are still hesitant, and affordability is the reason. Higher rates mean higher monthly payments, and that hits first-time buyers the hardest — something I see constantly here in the Seattle market, where our price points already run high. (If you’ve shopped for anything near a jumbo loan threshold around here, you know exactly what I mean.)
But notice the part people skip over: even with the downward revision, we’re still expected to sell more homes this year than last. And there’s pent-up demand building up behind the dam. As Lawrence Yun, Chief Economist at the National Association of REALTORS®, put it:
“There is sizable pent-up demand that could be released into the market.”
We’re already seeing a few glimmers of that — pending home sales have been improving month-over-month even with rates where they are. So if you can comfortably afford a home at today’s rates, buying now can still make a lot of sense. Wait too long, and you’ll likely face more competition and fewer homes to choose from once everyone else jumps back in.
What about new construction — is it a good time to buy a newly built home?
Builders expected a stronger year too. Earlier forecasts had new home sales topping 700,000 in 2026; now economists expect we’ll land just shy of that. Same culprit: mortgage rates.
But here’s where it gets interesting for buyers. When builders are motivated to move inventory, you tend to see builder incentives, room to negotiate, and pricing flexibility. If you’re shopping in an area with a lot of new construction, that can be a genuine bright spot — more leverage for you to land a better deal. This is exactly the kind of thing my team digs into when we map out a buyer’s strategy, because the right concession (a rate buydown, closing-cost credit, or completed repairs) can change your whole monthly picture.
Will home prices go down in 2026?
This is the single most important takeaway, so I want to be clear about it: no, prices are not expected to drop nationally. Even with slower sales activity, experts did not revise their home price forecast downward. They still expect prices to rise this year.
Why? Because while buyer demand has softened, the number of homes for sale is still relatively limited. That supply-and-demand imbalance keeps a floor under prices, even in a slower market. It’s the same dynamic I’ve watched play out across Puget Sound for two decades — when inventory is tight, prices hold.
Of course, real estate is local. Some markets are cooling faster than others, and your Bellevue condo and a new build in a fast-growing suburb may behave very differently. But nationally, the projection is steady growth, not a major decline. And that should be reassuring no matter which side of the table you’re on. Sellers obviously don’t want prices to fall. And buyers — even the ones rooting for a dip — generally feel a whole lot better about the biggest purchase of their life when it isn’t losing value the moment they sign.
So should I buy or sell now, or wait?
Here’s my take, and it’s the same advice I give clients over coffee: the market hasn’t rebounded as fast as the experts hoped, but “slower than expected” is not the same as “stalled.” Higher inflation and economic uncertainty caused the forecasts to be revised — and when those pressures settle, many experts believe the market will get its momentum back.
So don’t read this forecast revision as a warning sign. Read it as a temporary reaction to conditions that won’t last forever. The buyers who understand that — and who run the actual numbers instead of reacting to headlines — are usually the ones who come out ahead.
Mid-Year 2026 Market at a Glance
What changed
Late-2025 forecast
Revised 2026 outlook
Mortgage rates
Low 6s
Mid-6s (still below a year ago)
Existing home sales
~4.5 million
~4.2 million (still more than last year)
New home sales
700K+
Just under 700K (more builder incentives)
Home prices
Rising
Still rising — no downward revision
Frequently Asked Questions
Why did experts change their 2026 housing forecasts? Lingering inflation, economic uncertainty, and geopolitical tensions overseas kept mortgage rates higher for longer than predicted. Because rates stayed elevated, more buyers held off, so economists revised their rate, sales, and forecast numbers accordingly.
Are mortgage rates expected to drop in 2026? Most experts now expect rates to hover around the mid-6s for the rest of the year, rather than the low 6s originally projected. That’s still lower than a year ago, but a major drop isn’t anticipated unless inflation falls or overseas conflict resolves.
Will home prices fall in 2026? Nationally, no. Experts kept their price forecasts pointing up because the supply of homes for sale is still limited. Some local markets are cooling more than others, but a major national price decline is not expected.
Is it better to buy now or wait for lower rates? If you can comfortably afford a home at today’s rates, buying now means less competition and more inventory to choose from. Waiting for lower rates risks higher competition and fewer choices when sidelined buyers return.
Is now a good time to buy new construction? It can be. With new home sales softer than projected, many builders are offering incentives, price flexibility, and negotiation room — which can be a real advantage for buyers.
Bottom Line — Let’s Talk About Your Move
National headlines are a starting point, not a strategy. What actually matters is what’s happening in your neighborhood and what it means for your plans — and that’s where my team lives. At Team Reba, we work by a simple philosophy of care: Conduct, Advocacy, Representation, and Excellence. That means we don’t just hand you a market report and wish you luck; we sit down, run your numbers, and build a plan around your goals.
If you’re thinking about buying or selling in Seattle, Bellevue, or anywhere across the Eastside and Puget Sound this year, let’s connect and talk through what the rest of 2026 could look like for you.
Rebecca “Reba” Haas is a Seattle-area REALTOR® and team leader at Team Reba, RE/MAX Metro Eastside. She’s been helping buyers, sellers, and investors navigate the Puget Sound market since 2003.
