6 Keys to Navigating the Housing Market in H2 2026

The first half of 2026 was a dramatic period for the U.S. housing market, defined by sticky inflation, geopolitical tensions, and mortgage rates that refused to drop as quickly as many had hoped. Yet, the market has outperformed some expectations, largely due to strong wage growth and favorable mortgage spreads.

As we gear up for the second half of the year, Logan Mohtashami at HousingWire has outlined the key data points that will determine whether the market accelerates or stalls. Here are the metrics to watch.

1. Pending Home Sales Growth

Pending home sales provide a crucial week-to-week perspective on buyer demand. In the past, whenever mortgage rates broke above 6.64% (often pushing toward 7%), sales volume noticeably slowed . For the second half of 2026, the critical question is whether pending sales can achieve positive year-over-year growth regardless of rate fluctuations.

2. Mortgage Purchase Applications

Purchase application data is a forward-looking indicator that typically leads closed home sales by 30 to 90 days. So far in 2026, application data has shown resilience, with 21 weeks of positive year-over-year growth . If this momentum holds while rates remain elevated, it will signal that buyers have fully adjusted to the new cost of borrowing.

3. Inventory Levels

In 2025, inventory grew rapidly, surging 33% year-over-year at its peak . In 2026, however, inventory growth has been much slower, and recently turned negative year-over-year in some weeks. The key to the second half of the year will be observing how inventory behaves when rates dip below 6.75%. If supply remains constrained, price floors will remain exceptionally strong.

4. New Listings

Seasonality is returning to the market, and new listings are beginning their traditional late-summer decline. However, the market has struggled to reach normal listing volumes this year. While a normal seasonal peak would see 80,000 to 100,000 new listings per week, 2026 has rarely broken the 80,000 mark .

5. Price-Cut Percentages

Typically, about one-third of homes undergo a price reduction before selling. For most of 2026, the percentage of price cuts has actually been lower than it was in 2025 . This indicates that demand remains strong enough to absorb current inventory without forcing sellers to aggressively discount. If rates spike above 7%, this metric could change rapidly.

6. Mortgage Spreads

Mortgage spreads—the gap between the 10-year Treasury yield and the 30-year fixed mortgage rate—have been the unsung hero of 2026. Historically, spreads range from 1.60% to 1.80%, but they have been wider recently . However, if we had the worst spread levels of 2023 today, mortgage rates would be near 7.69% instead of the mid-6% range . Favorable spreads are the primary reason housing data has held up so well this year.

References

[1] HousingWire. "Keys to the housing market for the rest of 2026." June 20, 2026. Available at: