What To Expect from the Housing Market in Sioux Falls, SD in the Second Half of 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 first half of 2026 has made you feel stuck, you are not alone. Many buyers and sellers in Sioux Falls, SD have been waiting for mortgage rates to improve, affordability to loosen, and the market to feel more predictable.

Higher mortgage rates, tighter budgets, and global uncertainty have all played a role in slowing momentum. But as we head into the second half of the year, there are signs the housing market may begin moving in a more encouraging direction.

No forecast is guaranteed, but here is what buyers, sellers, and homeowners in Sioux Falls, SD should be watching closely.

Why This Matters in Sioux Falls, SD

The Sioux Falls housing market is not immune to national trends, but local demand, inventory, job growth, and neighborhood movement all shape what happens here.

Buyers looking in areas like Southeast Sioux Falls, Harrisburg, Brandon, Tea, west-side neighborhoods, and growing ZIP codes like 57108 and 57110 are still watching affordability closely. Sellers, meanwhile, want to know if buyer activity will pick back up enough to support strong pricing.

Nationally, the Federal Housing Finance Agency reported that U.S. home prices were up 1.7% year over year in the first quarter of 2026. That shows prices are still rising, just at a slower and more sustainable pace than the sharp increases seen in previous years.

For Sioux Falls, SD homeowners, that means waiting for prices to crash may not be the best strategy. Local conditions matter, but most forecasts still point toward modest price growth rather than major declines.

Mortgage Rates Could Be Near a Turning Point

One of the biggest reasons the housing market has felt slower is mortgage rates. Rates have stayed higher than many buyers hoped, and that has directly impacted monthly payments.

A major factor behind elevated rates is inflation. Energy prices, oil prices, and global uncertainty can all influence inflation expectations, which can then affect mortgage rate movement.

The U.S. Energy Information Administration tracks short-term energy outlooks, including crude oil price forecasts, which are closely watched because energy prices can influence broader inflation pressure.

What does that mean for buyers in Sioux Falls, SD?

If inflation begins cooling and energy costs stabilize or decline, mortgage rates could start to ease. Even a small drop in rates can make a meaningful difference in affordability, monthly payments, and buyer confidence.

For buyers who paused their search earlier this year, the second half of 2026 may create a better window to re-enter the market.

Home Prices Could Pick Back Up

A lot of buyers are hoping home prices will fall. While some markets may see small declines, most national forecasts still expect prices to finish 2026 slightly higher overall.

FHFA data shows U.S. home prices were already up 1.7% year over year in early 2026. If forecasts land near the projected low single-digit growth range, price growth may need to strengthen slightly in the second half of the year.

That does not mean a dramatic spike is coming. It means prices may continue rising at a healthier, more balanced pace.

For buyers, this matters because waiting does not automatically guarantee a better deal. If rates improve and more buyers return to the market, competition could increase again, especially for well-priced homes in desirable Sioux Falls neighborhoods.

For sellers, this is encouraging. If you have been worried about your home’s value, the broader outlook still supports stability and modest appreciation.

More Homes Are Expected To Sell

If the market has felt quieter, you are not imagining it. Many buyers and sellers have been waiting for more certainty before making a move.

But waiting does not mean demand has disappeared.

A lot of people still need to move because of job changes, family growth, downsizing, relocation, divorce, estate transitions, or lifestyle needs. If mortgage rates ease and confidence improves, more of that pent-up demand may return.

First American economists have noted that housing recovery will depend on rates, labor market conditions, and inventory growth.

That is especially important in Sioux Falls, where strong local employment, continued population growth, and steady relocation interest can support buyer activity when affordability improves.

If the second half of 2026 brings even slightly better conditions, more buyers may get back into the market and more sellers may finally feel confident listing.

What Buyers Should Watch

Tip 1: Watch monthly payment, not just price
A lower rate can change your buying power quickly. In Sioux Falls, SD, even a modest shift in mortgage rates could open up more options in your target price range.

Tip 2: Do not assume waiting guarantees savings
If prices continue rising and more buyers return, waiting could mean more competition later.

Tip 3: Get clear on your local market
National headlines do not always reflect what is happening in your specific neighborhood, price point, or property type.

What Sellers Should Watch

Tip 1: Inventory growth
More homes for sale gives buyers more choices. Pricing, presentation, and marketing strategy matter more in a balanced market.

Tip 2: Buyer confidence
If rates improve, buyers who paused earlier in the year may start moving again.

Tip 3: Local pricing strategy
The right launch price matters. Overpricing can cause a listing to sit, while strategic pricing can create stronger early activity.

How Amy Stockberger Real Estate Can Help

At Amy Stockberger Real Estate, we help buyers and sellers make confident decisions before, during, and forever.

Our Lifetime Home Support™ model gives clients long-term support beyond the transaction, including trusted vendor connections, local guidance, homeownership resources, and ongoing help through every season of owning a home.

For buyers, that means support with the search, negotiation, financing conversations, moving resources, and post-closing home needs.

For sellers, that means strategic pricing, marketing, staging guidance, vendor connections, and systems designed to help your home stand out in the Sioux Falls, SD market.

You also get access to our Home Support Team Partners, moving perks, concierge-style tools, and local resources that help make the process easier long after closing day.

Ready to Take the Next Step?

The second half of 2026 probably will not be perfect. But it may be better.

Mortgage rates could ease. Home sales may pick up. Home prices are expected to continue rising at a more sustainable pace. And for buyers and sellers in Sioux Falls, SD, that could create real opportunity.

If you have been waiting for a sign of progress, this is it.

Our team is here to help you understand what these forecasts mean for your next move and how today’s market conditions apply to your home, budget, timeline, and goals.

We are here to serve before, during, and forever.

 

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