Realtor.com’s chief economist, Danielle Hale, joined the Knowledge Brokers Podcast on Friday for a conversation on the midyear forecast. But the conversation went beyond that.
Hale weighed in on the toughest four-year market stretch of her two-decade career. Was it 2008-2012 or 2022-2026?
She also discussed the bipartisan 21st Century ROAD to Housing Act, which automatically became law on Saturday, July 11, after Trump declined to sign or veto the bill.
Read on for the highlights, then watch the episode to enjoy the full conversation.
The 5 Biggest Takeaways from the Midyear Forecast
Hale joined the KBP trio, Byron Lazine, Lisa Chinatti, and Tom Toole, to discuss Realtor.com’s midyear forecast.
Here are the five biggest takeaways from that part of the conversation.
#1: Mortgage Rates
Realtor.com’s forecasted rate held steady at 6.3% for both the year’s average and end-of-year rate, despite current rates at 6.5% or higher.
Hale backed it up while acknowledging the difficulty in forecasting further ahead:
“We’re far too humble to do a projection all the way out to the end of 2027 because a lot can happen. I will say that is in line with our projection for the rest of 2026.”
Rates dipped below 6% in February for the first time in 3.5 years, only to rise after the U.S. bombing of Iran, which led to the closure of the Straits of Hormuz. The conflict is ongoing, but some sort of stable truce is expected.
Lazine commented on the rate forecast holding steady:
“When I saw the 6.3 as the year-end mark and the average, I actually took that as good news that you didn’t change the forecast. Because this week’s been particularly bad for rates, and Mortgage News Daily is up over 6.6. But a 6.3 year-end and a 6.3 average would mean that the second half of the year, rates are going to come back down, maybe around that same September marker as last year, and get back down closer to six and a quarter versus where they are today over six and a half.”
#2: Housing Affordability
Realtor.com revised down its projection drop in the median monthly housing payment from 1.3% to 1.9%. Hale said:
“I think people are probably surprised to see that we expect that monthly payments for home buyers are going to fall. That was in our original forecast. We projected like a 1.3% drop. Now, we’re saying 1.9%. And that’s because we’ve softened our price growth forecast a little bit and we still have that benefit of mortgage rates coming in lower…
“So I think for affordability, whether we’re measuring as a monthly payment or especially a monthly payment share of income, buyers are seeing some improvement. Now, that doesn’t mean we’re out of the woods and homes are affordable to anyone and everyone.”
Another sign of that improvement is first-time homebuyers accounted for 33% of home purchases in June, up from 30% last year.
Hale pointed out this improvement isn’t getting much attention.
“It appears affordability is in a much better position today. But there’s not a lot of people that want to acknowledge that.”
#3: Sales Momentum
Year to date existing home sales are now up 0.7% compared to 2025, a jump from just 0.2% earlier in the year. June sales came in at 4.09 million, just under the pace Realtor.com needs to hit its 1% annual growth target, but enough to lift the year to date numbers meaningfully.
Hale commented on the year-to-date shift:
“We’re now 0.7% ahead of 2025. So, it is a pretty big step in the right direction.”
As to where the market will likely go from here, Hale sees improvement in the second half:
“I do think we’re going to see that momentum improve. We’re not going to get up to four and a half million sales, but I think 4.2 maybe even a month of 4.3 million in the second half of the year is possible.”
#4: Home Prices
Realtor.com expects just 1.2% nominal price growth in 2026. On a real, inflation-adjusted basis, that means home prices are actually falling.
Hale commented:
“I think we’re going to hover pretty close to flat. We might see small increases, small decreases, but I don’t think any big shift is underway for home prices.”
While that’s welcome news for buyers, there’s a silver lining for sellers, too:
“Sellers are still in a good position when they go to sell their house. They are still seeing that their home is getting a higher price than it did a year ago, which most sellers feel good about.”
#5: The Homes Shortage & Builder Inventory
Realtor.com still estimates the country is 4 million homes short of demand, but that shortage is heavily concentrated in the Northeast, as Hale explained:
“Our estimate is that we’re four million homes short. The range of estimates out there are pretty wide. I’ve seen them as high as 10 million and as low as one and a half million. Those national numbers are one thing, but it’s worth thinking about where the shortages actually are. The shortages are much less acute in the West and the South, where the policy environment is much more favorable to builders.”
Lazine brought up the inventory builders are currently sitting on due to the higher cost of construction:
“Builders are sitting at over 10 months of inventory in this country. Builders cannot build, if you’re talking about two million homes being absorbed into the market, they can’t build those homes.”
Which Four-Year Stretch Was Actually Tougher for Agents
Hale has close to two decades in the industry, starting at NAR in 2008 and now closing in on nine years at Realtor.com. That gives her a direct comparison point most people in real estate don’t have: she lived through the last housing downturn and this one.
Lazine asked Hale to compare the 2008-2012 market to what agents have experienced from 2022 to the present.
Hale sees 2008 to 2012 as harder on consumers, largely because of how steep the price correction was during that period.
“I think for consumers the ’08 period was probably a little bit tougher because there was a much bigger reset on prices. So I think consumers were right in the pain with the industry.”
Toole pointed out how challenging the 2008-2012 market was for agents as well:
“From a skill standpoint, there were some gut-wrenching conversations that I had from 2008 to 2012 with home sellers. Prices are going down. From a day-to-day standpoint and keeping your mindset straight, that was probably a little harder because there was nothing positive to say. Buyers were getting excited, but you got to go show them 35 to 40 houses because of the high inventory. That was much more of a grind.”
For agents specifically, Hale pointed to the four-year span agents are living in now:
“I think for agents this four-year period has been more challenging. It’s interesting because I saw more agents exit the market in 2011 and 2012, leaving the industry, than I feel like I do right now. But I found that market had more advantages because of the level of inventory.”
High inventory in 2008 to 2012 gave listing agents real opportunities to gain market share. Today’s tighter inventory makes that same play much harder to run, outside of a handful of high-inventory Sun Belt markets.
Hale added she’s seeing more introspection and infighting across the agent community right now, which she attributes in part to how tough business conditions have been.
The Housing Bill Everyone’s Watching
The bipartisan 21st Century Road to Housing Act became law on Saturday, July 11, 2026, after President Trump declined to either sign or veto it within the 10-day window.
Hale called it a meaningful step forward, even while acknowledging its limits.
“Is it perfect? No. But is it a good step forward? Yes, I absolutely think so.”
Here’s what the bill actually does:
- Ties community development block grant funding to local housing production
- Rewards communities with funding bonuses when they add housing units
- Penalizes communities that don’t see production growth
- Lays out federal best practice guidelines for local governments to adopt
- Rolls out its funding mechanism over a three-year period
The federal government still can’t override local zoning and building regulation directly. The funding incentives are designed to encourage communities to adopt those best practices on their own.
Hale explained this further:
“One of the things that I think is most interesting is the community development block grant funding mechanism will begin to have a tie-in to housing production. So communities will get bonuses for adding housing units to their market and penalties if they are not seeing housing units added to their market.”
Lazine agreed, adding:
“We’re in full alignment. That is my favorite part of the bill.”
Agents shouldn’t expect fast results here. With a three-year rollout, any real shift in local building activity will take time to show up in inventory numbers.
So, to recap, affordability is improving, rates are holding steady, and first-time buyers are re-entering the market in growing numbers. And while it’s too soon to say how much of an impact we’ll see from the new housing law, Realtor.com sees it as a step in the right direction.
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