What to Expect from the Housing Market in the Second Half of 2026

📍 Edmonds, Mukilteo, Shoreline & South Snohomish County, WA|Market Report|🏠 July 2026

If the first half of 2026 left you feeling like the right moment to buy or sell kept slipping away, you’re not alone. Mortgage rates stayed higher than most people hoped. Affordability remained a real challenge. And global uncertainty added pressure nobody anticipated. But there are genuine reasons to be more optimistic about the second half of the year — and some specific things worth watching if you’re considering a move in Edmonds, Shoreline, Mukilteo, or the surrounding area.

Where Mortgage Rates Are Headed

Mortgage rates have been the single biggest factor shaping the housing market in 2026. After creeping higher through the spring — partly due to inflation pressures tied to global uncertainty — rates are currently sitting in the mid-to-upper 6% range. Not where buyers were hoping to be, but not as painful as 2023 either.

The consensus among housing economists for the second half of 2026 is cautious optimism. Fannie Mae’s June 2026 Housing Forecast projects 30-year fixed rates will hover around 6.4% through the rest of the year. The Mortgage Bankers Association forecasts similar — around 6.5% in Q3 and Q4. A Reuters poll of housing specialists found rates are not expected to fall meaningfully in the near term, though a modest drift lower toward 6.3-6.4% by year end is possible.

What does that mean practically? Even a modest rate improvement — half a point or less — can meaningfully change a buyer’s monthly payment and qualify them for more home. On a $900,000 purchase in Edmonds, the difference between 6.8% and 6.3% is approximately $290 per month. That’s not transformational, but it’s real — and it could be enough to bring buyers who have been sitting on the sidelines back into the market.

The more important takeaway: waiting for rates to fall dramatically before acting is a strategy that has cost buyers in every year since 2022. The buyers who have done best are the ones who bought when their life and finances were ready — not when the rate environment was perfect.

What’s Happening with Home Prices

Most buyers hoping for a significant price decline are likely to be disappointed. The national consensus among housing forecasters points to continued modest price appreciation in the second half of 2026 — not the double-digit gains of 2021, but steady positive movement.

Federal Housing Finance Agency data shows home prices are up approximately 1.7% nationally year-over-year through mid-2026. Most major forecasters — including Fannie Mae at 3.2%, NAR at 4%, and the MBA at 0.6% — project the year will end in positive territory. The range of forecasts reflects genuine uncertainty, but the direction of the consensus is clear: prices are more likely to drift up than down.

In Edmonds and South Snohomish County, the local dynamics are even more supportive of price stability. Limited supply, consistent demand from Seattle-area move-up buyers, and the structural appeal of the waterfront community have historically kept this market more resilient than national averages during periods of uncertainty. The Edmonds median sale price reached $940,000 in late 2025, up 4.4% year-over-year — outpacing national appreciation even as the broader market has moderated.

As Danielle Hale, Senior Economist, explained in Realtor.com’s midyear update: “Buyers and sellers have shown a lot of staying power this year. This is a market where people are adjusting and showing up rather than giving up. Sellers are meeting the market with more realistic asking prices, which is helping deals get done.”

More Activity Expected in the Second Half

One of the clearest signals in the current data is pent-up demand. A significant number of buyers and sellers who wanted to move in the first half of 2026 didn’t — not because they changed their minds, but because the combination of rates, prices, and uncertainty made waiting feel safer. That demand hasn’t disappeared. It’s waiting for a clearer signal.

As Odeta Kushi, Deputy Chief Economist at First American, noted recently: “Overall, we expect pent-up demand to continue emerging gradually. But the pace of recovery will vary significantly across markets and will depend on the path of rates, labor market conditions and inventory growth.”

That last point — that recovery varies significantly across markets — is worth paying attention to. South Snohomish County is not Phoenix or Austin, markets that saw dramatic pandemic-era appreciation and are now working through meaningful corrections. Edmonds is a supply-constrained waterfront community with durable demand drivers. The pent-up demand story here is real and the inventory to absorb it remains limited.

What This Means for Buyers in Edmonds, Shoreline & Mukilteo Right Now

The buyers who will look back on 2026 with satisfaction are likely to be the ones who acted in the second half of this year rather than waiting for a perfect entry point that may not arrive. A few specific things worth keeping in mind:

• Inventory is still limited in the most desirable neighborhoods. In Edmonds, the Bowl, Talbot Park, Meadowdale, and Seaview consistently have fewer listings than buyers looking for them. The same dynamic holds in Richmond Beach in Shoreline and in Mukilteo’s waterfront neighborhoods. When the right home appears, hesitation is expensive.
• Rates can be refinanced. Purchase prices cannot be renegotiated after closing. Buying at today’s rate with the option to refinance when rates improve is a legitimate and time-tested strategy.
• Pre-approval is essential before you start seriously touring. Well-priced homes in core neighborhoods across Edmonds, Shoreline, and Mukilteo are still moving quickly — sometimes within days of listing. Being ready to act is what separates buyers who get homes from buyers who get disappointed.
• The 5-year hold principle still applies. If you plan to stay for five or more years, the long-term appreciation history of this market argues strongly for buying when your life and finances are ready.

What This Means for Sellers in Edmonds, Shoreline & Mukilteo Right Now

For sellers, the second half of 2026 presents a genuine opportunity — but only for those who approach it with realistic expectations about pricing and preparation.

• Price to current comps, not peak comps. The market has moderated since 2021-2022. Sellers who price to where the market was two years ago are producing the stale listings that are sitting right now.
• Preparation still pays. Buyers in this market have enough choices to be selective. Homes that are clean, well-presented, and professionally photographed consistently outperform those that aren’t — regardless of market conditions.
• Motivated buyers are still out there. The buyers who are actively searching right now have real reasons to move. They’re qualified, they’ve done their research, and they’ll act on the right home at the right price.
• Summer and early fall remain solid windows. The spring peak has passed, but June through September in Edmonds, Shoreline, and Mukilteo is still a strong selling season — particularly for properties that showcase the Puget Sound lifestyle at its best.

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