The Next 6 Months in Housing: More Inventory, A Modest Rate Tailwind, and a Foreclosure Drip

Where we are now

• Sales & supply: July existing-home sales ticked up to a 4.01M seasonally adjusted annual rate. Inventory rose to 1.55M homes (about 4.6 months’ supply)—the highest in years—signaling a market that’s loosening. Prices eased from June’s peak but remain ~$422,400 year over year. National Association of REALTORS®ReutersThe Wall Street Journal

• Rates: The average 30-year mortgage rate is hovering near a 10-month low (~6.58%)—helpful, but not a game-changer on its own. AP News

• Distress: Foreclosure activity is edging higher, not spiking. Mid-year filings rose ~5.8% vs. 2024, and July filings were up ~13% year over year (the 2025 high so far). Delinquencies also nudged up in Q1. ATTOMHousingWireMBA

What’s likely next (through February 2026)

1. Inventory keeps building (slowly). With more listings and longer days on market, buyers gain leverage. Expect more price cuts this fall, especially in overheated Sun Belt pockets. (NAR and multiple outlets note rising months’ supply and growing share of discounted listings.) National Association of REALTORS® The Wall Street Journal

2. Rates: mild help, not a rescue. Markets are leaning toward a quarter-point Fed cut in September, with odds of another by year-end. That may nudge mortgage rates lower—but remember: mortgages follow the 10-year Treasury and investor inflation views, not the Fed funds rate directly. Net: rates likely stay in the mid-6s, with volatility around Fed events. Reuters AP News

3. Foreclosures: watch the drip, not a wave. ATTOM’s data shows gradual increases in starts and completions. We expect elevated—but still historically contained—activity as higher payments and job churn bite some borrowers. Track monthly prints for acceleration. ATTOMHousingWire

4. Pricing: flatter nationally, divergence locally. With supply rising and affordability still tight, look for flat to low-single-digit gains nationally, with softer conditions where inventory has surged. (July price growth already slowed.) Reuters

What this means if you’re buying or selling

• Buyers: More choice and negotiability ahead. If the payment works at today’s rate, consider moving—small rate dips may not dramatically change affordability, but better inventory + price flexibility can. AP News

• Sellers: Price to the market and prep for longer marketing times. Concessions (rate buydowns, credits) can keep deals intact as buyers compare a growing set of options. Reuters

• Physician borrowers: Use physician-mortgage preapprovals to lock timelines around contract start dates and student-loan treatment; then shop terms across physician programs—not just a mainstream bank. Rising inventory improves your leverage even if rates only drift down. (Context from NAR on supply; rates from AP.) National Association of REALTORS®AP News

Bottom line: Expect a gradually more buyer-friendly market through winter: more listings, modestly easier rates, and a slow uptick in foreclosures that adds a bit to supply—but no 2008-style surge.

Latest market coverage you can scan quickly

US existing home sales tick up unexpectedly in July

Average rate on a 30-year mortgage holds steady at lowest level in nearly 10 months

Home Sales Surprisingly Rose in July While Prices Eased