Housing Market Forecasts for the Second Half of the Year

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As we move into the second half of the year, all eyes are on the housing market to see how shifting economic conditions, interest rates, and buyer behavior will shape what's next. Whether you're planning to buy, sell, or simply keeping an eye on trends, here's what you can expect for the rest of the year.

1. Mortgage Rates May Gradually Ease

Interest rates have been a major headline for the past year, impacting affordability and overall buyer demand. While rates remain higher than the ultra-low levels we saw a few years ago, there’s growing optimism that they may slowly start to decline. The Federal Reserve has hinted at potential rate cuts if inflation continues to cool, which could offer some relief to buyers and bring renewed activity into the market.

2. Inventory Will Remain Tight—but Improving Slightly

Low inventory has been a defining issue in the housing market, especially in desirable suburban and urban neighborhoods. While inventory challenges are expected to persist, we’re starting to see a gradual uptick in new listings as more homeowners adjust to the current market realities. Some sellers are no longer waiting for 3% mortgage rates to return—they’re deciding to move anyway, fueling a small but meaningful increase in homes for sale.

3. Home Prices Are Holding Steady in Most Areas

Despite cooling demand in some markets, home prices are holding strong thanks to limited supply. In many areas, especially those with strong job markets and good schools, home values continue to appreciate—albeit at a slower pace than in past years. Buyers looking for deals may find more negotiation room than last year, but deep discounts are still rare in most competitive areas.

4. Affordability Will Stay Top of Mind

With home prices elevated and mortgage rates still higher than what many are used to, affordability will continue to influence buyer decisions. Expect a growing interest in smaller homes, fixer-uppers, and suburban locations where buyers can stretch their dollars further. Creative financing options and rate buydowns may also play a bigger role in helping buyers make their moves.

5. Millennials and Gen Z Will Keep Driving Demand

Younger generations are not sitting on the sidelines. Millennials, many now in their 30s and 40s, remain a dominant buying force, while Gen Z is entering the market more quickly than expected. These groups are prioritizing lifestyle, location, and long-term investment over the idea of waiting for a “perfect” market.

6. The Market Will Be More Balanced—But Still Competitive

While we’re not seeing the frenzy of 2021 and early 2022, today’s market is more balanced between buyers and sellers. Well-priced homes in desirable neighborhoods still receive multiple offers, but bidding wars have cooled. Buyers can now take more time, do inspections, and even negotiate, while sellers still benefit from strong property values if their homes are market-ready.

Final Thoughts

The housing market in the second half of the year is shaping up to be stable, steady, and cautiously optimistic. While the wild swings of the past few years may be behind us, we’re entering a period where local expertise, smart strategy, and a long-term mindset will matter more than ever.

Whether you're buying, selling, or just exploring your options, staying informed is the key to making confident decisions in today’s evolving market.