07/10/2026
There has been a lot of positive news lately about the housing market, and overall, I believe much of it is supported by the data. That said, I also think many of the headlines are written as marketing pieces designed to encourage buyers and sellers to jump back into the market.
Here are a few areas where I think the forecasts deserve a little more context:
• Mortgage rates are not driven by oil prices alone. While lower energy prices can help reduce inflation, mortgage rates are influenced much more by bond markets, inflation expectations, Federal Reserve policy, and the overall economy.
• Affordability remains the biggest challenge. Even if mortgage rates ease slightly, home prices are still historically high in many areas, so monthly payments will remain a hurdle for many buyers.
• Real estate is local. National headlines don't tell the whole story. Here in the Pacific Northwest, market conditions can vary significantly by county and even from one town to the next. That's why national averages should never be used to estimate the value of an individual home.
• Home prices are still expected to appreciate, just modestly. Most national forecasts call for home values to increase approximately 1.2% to 2% during 2026. While that's a healthy sign for the market, it's a far cry from the double-digit appreciation we experienced during the pandemic years.
• More buyers may return, but don't expect a frenzy. There is significant pent-up demand, and lower rates could bring more buyers into the market. However, today's buyers are more cautious, negotiate harder, and take longer to make decisions than they did a few years ago.
• Inventory is improving, but we're not back to a balanced market everywhere. More homes on the market means buyers have more choices, but inventory levels still vary greatly from one region to another.
My outlook for the second half of 2026 is cautiously optimistic. I expect a healthier, more balanced market than we've seen over the past couple of years, but not a return to the rapid appreciation and bidding wars of 2021.
As always, don't make real estate decisions based solely on national headlines. The best advice comes from understanding what's happening in your local market and how those conditions apply to your specific goals.
If you're curious about what the market looks like in Pierce, South King, North Thurston, or North Lewis County, I'd be happy to share what I'm seeing on the ground.
Call me at (253) 576-4100 or email [email protected]