The 2026 Home Buying Season’s Fork in the Road (June 2026 Forecast)

We entered 2026 with an optimistic view of the housing market’s year ahead: 2026 wasn’t going to be a normal market, but it was at least a step on the road to a more normal market, meaning sales growth in the range of 4-5% but sales volume still well below the pre-pandemic norm. 

This forecast for the market was largely playing out in the early part of the year, with monthly sales growing 5.5% year-over-year at the end of the first quarter. 

Unfortunately, the run-up in mortgage rates experienced over the course of the second quarter has put that recovery on pause. Sales growth dropped to 1.5% year-over-year in May, and our revised estimate for June has sales rising by only 0.8%. 

With our latest forecast, this slowdown is what we’re currently projecting for the rest of 2026.  Zillow’s latest forecast calls for roughly flat home values and existing home sales in 2026, driven by reversion to mortgage rates in the mid 6’s. 

Home values are projected to rise by just 0.1% this year, the same as in last month’s forecast. A continued rise in inventory and muted sales volume are expected to keep a lid on home value growth. Buyers in most markets will find prices still climbing, but at a pace that leaves more room for incomes to catch up than in prior years.

Existing home sales are now projected to reach 3.76 million in 2026, according to Zillow’s sales count nowcast, a decrease from last month’s estimate of 3.8 million. This would represent a 0.4% decline from 2025. Elevated mortgage rates and recent sales weakness are behind expectations for more limited market activity heading into the second half of the year.

Zillow projects single-family rents to rise 3.1% in 2026, while multifamily rents are expected to increase 2%. This would represent modest relief for renters, with rent growth running below historical norms across most of the country.

As we noted in our initial modeling of the impact of higher energy prices on the sales year, the shape of the market could still be shaped by nonlinear responses of home buyers and sellers to the changing interest rate landscape, meaning more people may try to play catch-up or sit out the rest of the season. Those risks are likely balanced, so the release of our June sales data on July 7th will be our next timely signal about how those forces are balancing out. 

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