06/04/2026
May 2026 Market Action Report
As we move into the summer selling season, the housing market continues to show surprising resilience despite economic uncertainty and mortgage rates that remain elevated compared to recent years.
The biggest takeaway from May is that buyers are still buying.
In Southwest Washington, pending sales and closed sales continue to outpace last year's numbers, even as the number of new listings coming to market remains lower. Inventory held steady at 3.3 months, which suggests the market is finding some equilibrium. Prices continue to move upward, although at a much more sustainable pace than we experienced during the pandemic years.
Portland Metro tells a slightly different story. New listings declined significantly from a year ago, while inventory remains above last year's levels. Buyers are active, but they're being selective. Homes that are priced appropriately and presented well are attracting attention, while sellers who are chasing yesterday's prices are often finding themselves making reductions or spending more time on the market.
One trend I've been watching closely is the disconnect between the headlines and actual buyer behavior. Many consumers continue to say they're waiting for lower interest rates, yet pending sales continue to increase in both markets. The reality is that life events don't pause for mortgage rates. People are still relocating, upsizing, downsizing, getting married, getting divorced, retiring, and changing jobs.
Looking ahead, there are two factors that could influence housing during the second half of the year: inflation and the growing tensions involving Iran and the broader Middle East.
Inflation has proven to be more stubborn than many economists expected. While it has come down substantially from its peak, any increase in energy prices could slow that progress. Historically, rising fuel costs ripple through the economy, increasing transportation, construction, and consumer expenses.
The situation in Iran adds another layer of uncertainty. Any disruption to global oil supplies could push fuel prices higher and potentially create additional inflationary pressure. For housing, that matters because inflation is one of the primary drivers of mortgage rates. If inflation remains elevated, rates may stay higher for longer than buyers and sellers would like.
That said, uncertainty doesn't always translate into a weaker housing market. During periods of global instability, investors often seek the safety of U.S. Treasury bonds, which can place downward pressure on interest rates. The result may be more volatility in mortgage rates rather than a clear upward or downward trend.
For now, the local market remains remarkably steady. Inventory levels have improved from the extreme seller's market conditions of the past few years, giving buyers more choices and negotiating power. At the same time, demand remains healthy enough to support pricing in many neighborhoods.
As always, real estate is local. National headlines can influence sentiment, but the value of your home is ultimately determined by what's happening in your neighborhood, not in Washington D.C. or the Middle East.
If you're curious about what these trends mean for your property, I'd be happy to provide a data-driven analysis specific to your area.
Noah Realty 360.450.7374
