The Housing Market in June 2026
Looking back at the second quarter of 2026, economic activity continued to expand at a solid pace, despite geopolitical conditions and the effects on energy price inflation. Productivity growth and investment were strong, which contributed to positive net growth in the country's GDP. Moreover, the labor market continued to add jobs and the unemployment rate remained essentially unchanged since February 2025.
Meanwhile, inflationary pressures made June a difficult month for the housing market. Due to energy supply shocks, inflation remained above the Federal Reserve's target, prompting it to halt rate cuts for another month. If oil prices fall and inflation subsides, the Fed will be more likely to cut rates, and mortgage rates will likely decrease. Until then, mortgage rates are expected to remain elevated in the mid 6%-7% range.
The fluctuations in borrowing rates, combined with record-high median home prices, are making potential homebuyers even more sensitive to affordability conditions. First-time homebuyers, in particular, are taking a step back. Both existing-home sales and pending home sales saw a mild dip in June, but the number of loan applications suggests demand for housing will likely increase next month.
Nevertheless, rates are only a small part of the big picture. As the labor market shows signs of strengthening, more states are adding jobs and outperforming their pre-pandemic job-creation levels. If construction catches up to jobs and wage growth, those who are looking to buy a home might see relief soon.