Mortgage Rates are at their highs for the year. [czqIVBXb9cn]
The July 4 holiday week marks the beginning of the normal seasonal slowdown in the housing market, but this year the shift comes as mortgage rates are sitting near their highs for 2026. Rates are now around 6.6%, and early mortgage indicators are beginning to show signs of buyer slowdown. While pending home sales are still running ahead of last year, the question for the second half of the year is whether demand can hold if rates stay in the upper sixes or move closer to 7%. So far, the housing market has shown slow but steady improvement. Pending sales are 3.9% ahead of last year through July 10, inventory is essentially flat with 2025 levels, days on market are only 4% longer than last year, and price reductions remain slightly lower than this time in 2025. Inventory is no longer growing nationally. There are approximately 1.07 million homes on the market, which is roughly unchanged from last year, still 15% below 2017 levels, and about 30% higher than 2024. Pending home sales dipped during the holiday week, which is normal seasonality, but they remained 4.4% ahead of the same week last year. On a four-week average basis, sales are still running above 2025 levels. Home prices are also showing signs of stability. The Case-Shiller Index shows national prices up just 0.8% from last year, with tight inventory markets like Chicago, New York, Boston, and Detroit continuing to lead price growth. At the same time, markets with more inventory remain under pressure, though Florida and parts of California are beginning to show improvement. The takeaway: 2026 has finally delivered modest housing market gains, but they remain fragile. If mortgage rates stay elevated or move closer to 7%, buyer demand could soften and inventory could rise again. If rates ease, the market may continue its slow recovery. About Mike Simonsen Mike Simonsen is the Chief Economist at Compass International Holdings and founder of Altos Research. He is known for his real-time housing market analysis, tracking inventory, pricing, mortgage rates, and buyer demand weeks before traditional housing reports are released. Subscribe for weekly housing market updates and real-time housing data insights. This post is for informational purposes only. It is not intended as financial, legal, or real estate advice. Any market forecasts or predictions discussed are speculative and are subject to change. Actual results may differ. You should seek their own professional advice before making decisions. Compass disclaims any liability for reliance on this content. #HousingMarket #RealEstate #HousingMarketUpdate #RealEstateMarket #HousingTrends #HomePrices #Inventory #MortgageRates #HousingData #marketupdate #mikesimonsen