Mid-Year Housing Market Update for Sioux Falls, SD: Why Forecasts Changed in 2026

Author Amy Stockberger | Founder, Amy Stockberger Real Estate | Creator, Lifetime Home Support™ Academy | Ranked the #1 Real Estate Team in South Dakota since 2017 and #33 in the Nation by Real Trends

 

If the housing market feels confusing right now, you are not alone. Buyers and sellers in Sioux Falls, SD are watching mortgage rates, home prices, inventory, and national economic headlines shift month by month.

At the end of 2025, many economists expected 2026 to bring lower mortgage rates, improved affordability, and stronger home sales. But the first half of the year brought a different reality. Inflation stayed stubborn, economic uncertainty continued, and global tensions pushed mortgage rates higher than many experts originally predicted.

That has caused several major housing forecasts to be revised for the rest of 2026. For buyers and sellers in Sioux Falls, SD, this does not mean the market is in trouble. It means strategy matters more than ever.

Why This Matters in Sioux Falls, SD

The national housing market affects local buyer confidence, mortgage rates, and affordability, but real estate is still highly local. In Sioux Falls, SD, demand continues to be influenced by relocation, job growth, first-time buyers, move-up buyers, new construction, and homeowners who need to make life-stage moves.

Neighborhoods and surrounding communities like Harrisburg, Tea, Brandon, Lennox, Hartford, and McCook Lake may all feel market shifts differently. Some price points may move quickly, while others may require more negotiation, stronger marketing, or better pricing strategy.

That is why it is important not to make decisions based only on national headlines. A revised forecast does not automatically mean it is a bad time to buy or sell. It means you need to understand what is happening locally, what your budget or equity position looks like, and how to move with the right plan.

2026 Housing Market Update: What Buyers and Sellers Should Know

Mortgage Rates May Stay Higher Than Expected

Earlier forecasts suggested mortgage rates could move back into the upper 5% or low 6% range in 2026. So far, that has not happened as quickly as many buyers hoped.

Because inflation and economic uncertainty have remained factors, many experts now expect mortgage rates to stay closer to the mid-6% range for much of the year. While that may still feel high compared to the ultra-low rates of a few years ago, it is important to remember that rates are still part of a bigger picture.

For buyers in Sioux Falls, SD, waiting for the “perfect” rate could mean facing more competition later if rates eventually drop and more buyers re-enter the market.

Existing Home Sales Were Revised Lower

At the end of 2025, economists expected a stronger rebound in existing home sales for 2026. Those projections have now been adjusted lower because buyer affordability is still a challenge.

Higher mortgage rates impact monthly payments, especially for first-time buyers and families trying to move up into a larger home. That has slowed activity in some areas, but it has not stopped the market.

Even with revised forecasts, home sales are still expected to improve compared to last year. That matters because many buyers are still on the sidelines, waiting for more certainty. When rates begin to settle or confidence improves, that pent-up demand could return quickly.

For buyers who can comfortably afford today’s payment, acting now may create an opportunity before competition increases again.

New Home Sales Also Slowed

Builders also expected stronger activity in 2026, but new home sales have not moved as fast as originally projected. Mortgage rates are one of the biggest reasons.

That said, this can create opportunity for buyers. In markets with more new construction options, builders may be more open to incentives, rate buy-downs, upgrades, closing cost assistance, or pricing flexibility.

For buyers exploring new construction in and around Sioux Falls, SD, this could be a strong time to compare options and negotiate with the right guidance.

Home Prices Are Still Expected to Rise

One of the biggest takeaways from the mid-year forecast updates is that experts have not dramatically lowered home price expectations.

Even though sales activity has slowed, home prices are still expected to rise nationally in 2026. Why? Because inventory remains limited in many areas. When there are not enough homes available for the number of people who want to buy, prices tend to stay supported.

For sellers, this is encouraging because it shows that slower sales activity does not automatically mean home values are falling. For buyers, it is also important because waiting may not lead to lower prices. In many cases, waiting could mean paying more later if home values continue to climb.

 

How Amy Stockberger Real Estate Can Help

Amy Stockberger Real Estate helps buyers and sellers make confident decisions in a shifting market by combining local expertise, strategy, and long-term support.

Through Lifetime Home Support™, our clients receive value far beyond the transaction. Whether you are buying your first home, selling to move into your next chapter, relocating to Sioux Falls, or trying to understand your home’s current value, our team is here to help you make the smartest move possible.

Our Home Support Team connects clients with trusted local service providers for home maintenance, repairs, improvements, moving support, and more. That means you are not left figuring everything out alone after closing.

For sellers, we help position your home with the right pricing strategy, marketing plan, and preparation support. For buyers, we help you understand payment options, negotiation opportunities, local inventory, and long-term value.

You can also use our local real estate resources and tools to get answers faster, compare options, and move with more confidence.

Ready to Take the Next Step?

The 2026 housing market may not be moving exactly the way experts predicted, but that does not mean buyers and sellers should sit still. It means your strategy needs to match the current market.

If you are wondering whether to buy, sell, wait, refinance, relocate, or explore new construction, our team can help you understand what is happening in Sioux Falls, SD and what it means for your goals.

At Amy Stockberger Real Estate, our team is here to serve before, during, and forever through Lifetime Home Support™.

 

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