Leslie Appleton Young, Chief Economist for FMLS, describes a housing market that remains stable but sluggish. The spring buying season ended weaker than expected, largely because elevated mortgage rates and economic uncertainty continue to keep buyers and sellers on the sidelines.

Key takeaways include:

• Existing home sales in June were 4.09 million on a seasonally adjusted annual basis, up 2.8% from June 2025.
• June sales fell 2.4% from May, despite expectations for a slight increase. This reflects contracts signed during April and May when mortgage rates jumped following geopolitical tensions surrounding Iran.
• Because closings lag contract activity by 30 to 60 days, the June decline should not automatically be viewed as the beginning of a larger downturn.
• NAR forecasts 4.9 million existing home sales for 2026. Meeting that forecast requires stronger sales during the second half of the year, which depends largely on whether mortgage rates decline.

The Biggest Driver Remains Mortgage Rates

Mortgage rates continue to dictate buyer activity. The report notes several unknowns affecting rates:

• Global geopolitical tensions.
• Oil prices.
• Treasury bond yields.
• Inflation expectations.

Until buyers gain confidence that rates have stabilized, many discretionary buyers will continue delaying purchases. Sellers are responding similarly by postponing listings.

The result is a market with limited activity rather than severe price declines.

The Housing Market Is Becoming Increasingly “K Shaped”

One of the strongest themes is the growing separation between higher income buyers and everyone else. Nationally:

• Homes priced above $1 million saw sales increase 18% year over year.
• Mid priced homes experienced much slower activity.
• Affordable homes remain the weakest segment.

Consumer wealth increasingly determines who is buying.

Atlanta Is Following The Same Pattern

Metro Atlanta mirrors the national trend. Single family detached home sales:

• Overall June sales decreased 1.5% year over year.

By price range:

• Over $600,000. Sales increased modestly.
• $350,000 to $600,000. Sales declined 1.1%.
• $200,000 to $350,000. Sales declined 6.6%.

This highlights continued weakness among first time and middle income buyers while higher end buyers remain active.

Larger Homes Continue To Outperform

Buyer demand is also splitting by home size.

• Homes larger than 2,000 square feet posted sales gains.
• Homes under 2,000 square feet experienced nearly a 9% decline.

While smaller homes are traditionally considered more affordable, affordability pressures have reduced demand even in this segment.

Affordability Is The Market’s Biggest Challenge

Young identifies affordability as the dominant issue facing today’s market. The National Association of Realtors Housing Affordability Index has declined for five consecutive months. The median monthly mortgage payment has increased dramatically:

• 2020: Approximately $1,240.
• 2026: Approximately $2,420.

Monthly payments have nearly doubled while household incomes have not kept pace. Without one or more of the following, affordability will remain difficult:

• Higher household incomes.
• Lower home prices.
• Meaningfully lower mortgage rates.

At present, none of those appear likely in the near term.

Buyer Expectations Need To Adjust

The report emphasizes an important role for REALTORS®. Many first time buyers continue searching for homes based on pre 2020 pricing expectations rather than current affordability realities. Helping buyers understand what their monthly payment supports has become one of the industry’s most valuable services.

Outlook For The Rest Of 2026

The overall forecast remains largely unchanged. Expect:

• Slower than normal home sales.
• Relatively stable home prices.
• Mortgage rates remaining elevated.
• Continued uncertainty affecting buyer confidence.

Rather than anticipating a sharp correction or rapid rebound, FMLS expects the second half of 2026 to resemble the first half with a cautious, low volume market.

What This Means For Atlanta Buyers And Sellers

For buyers:

• Inventory remains better than it has been in recent years.
• Negotiating opportunities continue in many price ranges.
• Waiting for dramatically lower rates carries uncertainty.

For sellers:

• Proper pricing is more important than ever.
• Well prepared, move in ready homes continue to outperform.
• Luxury homes remain the strongest segment of the market.
• Buyers are highly payment sensitive, especially below $600,000.

Overall, the July FMLS Market Intel Report reinforces a market that is neither booming nor collapsing. It is a market defined by affordability constraints, elevated mortgage rates, and cautious consumers. Activity continues where buyers have financial flexibility, particularly in the luxury segment, while first time and middle income buyers remain under the greatest pressure. For Atlanta agents, success increasingly depends on setting realistic expectations, pricing accurately, and helping clients make informed decisions in a market driven more by monthly payments than by home prices alone.