Macro

As of mid-2026, the Federal Reserve under Chair Kevin Warsh has held its target rate at 3.50%-3.75% after no cuts this year, reversing earlier expectations. The FOMC cited solid economic growth despite Middle East conflict-driven uncertainty. With the last cut in late 2025, the Fed's dot plot and CME's FedWatch tool now indicate a possible rate hike later in 2026, driven by rising energy prices and geopolitical tensions. Experts like Gary Pzegeo of CIBC Private Wealth expect one or two increases to cool demand. Consumers are advised to pay down variable-rate debt, lock in fixed borrowing rates, and boost savings in anticipation of higher borrowing costs.

Experts do not foresee a housing market crash in 2026, describing the current environment as a stable correction rather than a collapse. Homeowners hold record equity, averaging nearly $300,000, lending standards are sound, and inventory remains constrained at a 4.5-month supply—far from the 13-month oversupply before the 2008 crisis. U.S. annual home price growth was 0.8% in May 2026, up from 0.4% in April, reflecting modest gains. While the economy lost 966,000 job openings last year, private-sector hiring beat expectations in June 2026 with 98,000 jobs added, and pay rose 4.4% year-over-year. Mortgage rates have climbed back to the mid-6% range, and affordability declined in May after eight months of improvement. Experts note that today's market differs fundamentally from 2008 due to tighter lending practices—subprime and no-documentation loans are gone—and higher homeowner equity. A crash remains unlikely unless a major economic shock, such as a stock market crash or prolonged job cuts, triggers widespread job losses and foreclosures. Local market conditions vary, and some areas may see price declines, but a national crash is not expected.