New housing data arrives this week, including existing home sales on Wednesday and new home sales on Thursday. The data is likely to reflect what continues to be a sluggish housing market. How long will it remain stagnant?

Spring and summer of 2025 were supposed to mark the beginning of the housing market comeback. Selma Hepp, chief economist at Cotality, said that was dependent on one important factor.

“You know, economists have been saying for the last couple of years, you know, mortgage rates are going to get lower, mortgage rates are going to get lower,” said Hepp.

But they haven’t gone down. The average 30-year fixed is 6.75%, which is about where it was this time last year. And it’s probably not budging anytime soon.

“Persistent inflation, you know, pretty strong economy given how much rates have gone up, you know, some of the new initiatives by the current administration,” Hepp said.

But there are some regional bright spots. There’s been some price relief in Florida and Texas where inventory is up. In general, though Robert Dietz, chief economist at the National Association of Home Builders, said sentiment among home builders is down.

“That has been in negative territory now for 15 straight months,” said Dietz.

Between hesitant homebuilders and the high cost of borrowing, Dietz said people who have been waiting to enter the market may need to wait longer. Or adjust their expectations. 

“The current rate environment is likely to be the new normal,” said Dietz.

He thinks longer term, mortgage rates will move closer to 6% over the next two or three years.