Home sales in July experienced their strongest annual gain of 2026 — up 7% — according to real estate technology company Zillow, which also predicted rising mortgage rates that could dampen expectations following the positive housing market development.

“Unless they reverse course, mortgage rates will be higher than last year in August, likely enough to push the typical mortgage payment above year-ago levels,” Zillow said in a statement.

“July was a strong month for existing home sales, but unfortunately it may represent the peak of what we can expect for the rest of the year,” said Mischa Fisher, chief economist at Zillow. “Closed sales in July mostly reflect offers accepted in June, when underlying pent-up demand for housing, combined with an improving rate environment, drove strong activity.”

“Unfortunately, the weak growth in newly pending sales in July and the worsening rate environment portend a weaker half of the year for sales growth, with flat to declining transaction volumes for the remainder of the year in some regions.”

Freddie Mac reports rising mortgage rates

The 30-year fixed-rate mortgage (FRM) averaged 6.69% for the week, up from 6.66% the previous week, Freddie Mac reported on August 6. The 30-year FRM averaged 6.63% at this time in 2025.

“While mortgage rates continue to influence affordability, the housing market is showing signs of adjustment, with listing prices modestly below year-ago levels and for-sale inventory improving from the limited supply seen in recent years,” Freddie Mac wrote.

On August 11, the 30-year FRM was 6.79%, according to Mortgage News Daily (MND).

“It ended up being a remarkably uneventful day for mortgage rates,” wrote Matthew Graham of MND. “Some lenders were slightly higher than yesterday. Others were roughly unchanged. The difference came down to whether the lender in question raised rates yesterday afternoon.”

“What does this mean?” Graham asked. “Lenders prefer to set rates once per day around 10 a.m. ET. But if the underlying bond market makes a big enough move, lenders can change rates during the day.”

“Bonds lost just enough ground yesterday for some lenders to raise rates. Contrast that to today where virtually every lender maintained the same levels throughout.”

Inflation rebound expected

The upcoming Consumer Price Index (CPI) report for July 2026 is expected to show a return to rising inflation, Morningstar predicted.

In June, the CPI fell 0.4 percent, seasonally adjusted, and rose 3.5 percent over the last 12 months, not seasonally adjusted, reported the Bureau of Labor Statistics (BLS).

“There’s no way to know how it will impact rates ahead of time — only that a large deviation from expectations is likely to result in a larger-than-average move higher or lower.”

Zillow describes disappointing housing market

“The affordability edge that has been a silver lining to an otherwise disappointing home shopping season may disappear in the coming months,” Zillow wrote.

U.S. home values have risen 1.1% year over year, according to Zillow. Despite that gain, a buyer putting 20% down on a typical home in July saw their monthly mortgage payment drop by 0.9% compared to last year.

Unfortunately, the weak growth in newly pending sales in July and the worsening rate environment portend a weaker half of the year for sales growth ….”

But rising mortgage rates may soon negatively impact the housing market.

“This portends a weaker half of the year for sales growth, with flat to declining transaction volumes for the remainder of the year in some regions,” Zillow wrote.

Zillow predicts higher mortgage rates during the second half of 2026. Shutterstock© Shutterstock

Zillow releases home value, home sales data

The following data reveal a snapshot of some key housing market indicators, according to Zillow.

Core home value: The typical U.S. home is currently valued at $371,757.
Closed sales activity: Zillow’s initial estimate shows 382,898 homes sold in July — a 7% increase year-over-year, though down 2.7% from June (figures subject to mid-month revision).
New contract volume: Newly pending listings edged up 0.3% compared to last July, but dropped 7.7% month-over-month.
Time on market: Homes typically spent 25 days on the market before going pending in July, slowing down by one day from last year and five days from June.
Price drop frequency: Discounting shifted slightly, with 27.1% of active listings receiving a price reduction in July (down from 27.4% last year, but up from 25.7% in June).
Above-list sales: Competition remained steady into early summer, with 30.8% of June sales closing above asking price — nearly flat compared to 30.9% a year prior and up slightly from May’s 30.2%.
(Source: Zillow)

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2026 Boston condo for sale predictions

The usual new-year predictions are trickling out, and so far, they all expect that the 2026 real estate market will look like this year did. If there are any unusual revelations, I’ll post them, but none expected.

2026 Boston condo for sale predictions

There will likely be an increase in the number of Boston condos for sale in 2026 – on top of the hundreds of unsold that rollover from 2025. In 2025 overpriced listings just got ignored and buyers took a minor discount for the least desirable downtown Boston condos for sale.

I’m guessing that the surging inventory will have a more profound impact next year. Boston condo sellers will slightly-discount, buyers will demand a bigger discount in 2026 – and instead of sellers getting lucky, the deals will become harder to make

It’s only a theory, but it’s plausible that the Boston condo sellers will have a harder time selling next year as the market is flooded with new inventory and buyers gain more negotiating power. Instead of taking a tiny discount, they will just say no.

2026 Boston condo for sale predictions

While it would be easy to give up on the market for the rest of 2025, these lower rates (jumbo rates in the high-5s) are inspiring buyers to stick around to see what happens! It should make for a good springboard into the new year, because the buyers who would have normally checked out at the end of summer won’t have to wait to get their chops up in January – they will be ready to go!

I think the pricing trend will still be slightly negative for the rest of the year but come January the sellers will have a renewed faith in their price being right just because it’s a new year.

2026 Boston condo for sale predictions

In 2026, the Boston real estate market is expected to remain resilient, buoyed by the region’s strong local economy in the technology, education, and health sectors. This trend contrasts with some national markets that may see price declines. While affordability will remain a challenge due to high prices, more balanced conditions are likely, with modest home price increases and a slight rise in inventory.

Price and inventory trends

Modest price growth: Unlike the market volatility seen during the pandemic, Boston is expected to see modest, single-digit home price appreciation in 2026. In its August 2025 forecast, Zillow projected that the nearby metro area of Hartford, Connecticut, would see a 4.1% increase between August 2025 and August 2026, a forecast that is indicative of the Northeast’s resilience.
Limited but increasing inventory: Housing inventory is projected to increase modestly, offering buyers more options than in previous years. However, the number of homes for sale will likely remain below pre-2020 levels, so the market will not be flooded with options.
Affordability challenges persist: Despite the more balanced conditions, housing affordability in the Boston metropolitan area will continue to be a significant challenge due to high home prices. This issue is particularly acute for low-to-moderate-income (LMI) buyers.

Factors influencing the 2026 market

Resilient local economy: Boston’s economy, supported by the booming tech and biotech industries, top-tier universities, and medical institutions, attracts highly skilled professionals and maintains strong housing demand.
Higher mortgage rates: Mortgage rates are expected to remain elevated, likely hovering around 6% in 2026. This “higher-for-longer” rate environment will continue to impact affordability, keeping some buyers on the sidelines.
Increased construction and refinancing: Mortgage originations in Boston are forecasted to increase, driven by both higher home prices and a rise in refinancing activity.
Renter demand remains strong: With high homebuying costs, demand for rentals is projected to stay robust. After absorbing a period of oversupply from new construction, the rental market could see lower vacancy rates and accelerating rent growth in 2026 and 2027

Implications for buyers and sellers

For buyers:

The market conditions are improving slightly compared to the peak of post-pandemic competition.
You may have more bargaining power and a better chance to negotiate prices below the asking price, especially for homes that require upgrades.
The slight increase in inventory offers more choices. Focus on the total cost of ownership and look for refinancing opportunities if rates trend lower in the future.

For sellers:

The market is still favorable for sellers, but competition is easing, and you may receive less aggressive offers compared to recent years.
Well-priced, move-in-ready homes are likely to sell quickly, but you may need to offer concessions like rate buydowns or credits to attract buyers.
Waiting to sell could expose you to higher competition as more inventories comes onto the market later in 2026.