Market and Economic Update as of August 2026

As we head into September, the economy continues to send some mixed signals — and those signals are having a direct impact on the housing market.

The Economy

One of the biggest things economists are watching right now is the labor market. Hiring has slowed considerably, and recent data has shown the economy losing jobs in July. While the unemployment rate remains relatively low, the bigger story is that businesses are simply not hiring at the pace we have become accustomed to.

Normally, a slowing economy would make it easier for the Federal Reserve to lower interest rates.

The complication? Inflation is still hanging around.

Prices have continued to rise enough that the Federal Reserve has to balance two competing concerns: supporting a weakening labor market while also preventing inflation from accelerating again.

Another interesting factor is the enormous amount of investment currently flowing into artificial intelligence and technology infrastructure. Hundreds of billions of dollars are being invested into data centers, equipment, energy infrastructure, and other AI-related projects. That investment can support economic growth, but it can also add additional inflationary pressure.

So right now, we have an unusual combination:

• Slower hiring

• Persistent inflation

• Large amounts of business investment

• Interest rates that may remain higher for longer

What Does This Mean for Mortgage Rates?

One of the biggest misconceptions in real estate is that when the Federal Reserve lowers rates, mortgage rates automatically fall too.

They don't.

Mortgage rates tend to move much more closely with the 10-year Treasury yield, which reacts to expectations surrounding inflation, economic growth, government borrowing, and the overall bond market.

That is why waiting for the Federal Reserve to make its next move doesn't necessarily guarantee buyers will see dramatically lower mortgage rates.

Mortgage rates have recently been hovering around the upper-6% range, and the direction from here will depend heavily on what happens with inflation and the broader economy.

What It Means for Buyers

For buyers, today's market requires looking beyond the interest rate alone.

Many buyers have spent the past few years saying, "I'll buy when rates come down." But there is no guarantee that rates will fall quickly — and if rates eventually do drop significantly, many of the buyers currently waiting on the sidelines could enter the market at the same time.

That could mean:

More competition + fewer negotiating opportunities + upward pressure on home prices.

Right now, buyers may have something they didn't have during the ultra-competitive pandemic market: negotiating power.

Depending on the property, buyers may be able to negotiate price reductions, seller-paid closing costs, repairs, or even seller contributions toward a temporary or permanent mortgage-rate buydown.

The important question isn't necessarily "Are rates perfect?"

It's "Does buying make sense for my finances, needs, and long-term plans right now?"

What It Means for Sellers

For sellers, buyers are still in the market — but they are becoming increasingly selective.

With affordability stretched by higher mortgage rates, buyers are paying closer attention to:

• Price

• Property condition

• Monthly payment

• Comparable sales

• How long a property has been sitting on the market

That makes accurate pricing especially important.

A home priced correctly and presented well can still attract strong interest. A home that starts too high may sit longer and eventually require price reductions.

The Bigger Picture

The housing market isn't frozen — it is adjusting.

People still move because of marriages, growing families, job changes, relocations, divorces, inheritances, downsizing, financial changes, and dozens of other life circumstances.

The difference is that today's buyers and sellers have to make decisions in a market where affordability and financing matter much more than they did several years ago.

And while nobody can perfectly predict where rates will be six months from now, understanding what is happening today allows homeowners to make decisions based on their situation — instead of trying to perfectly time the market.

Bottom line: The economy is slowing in some areas while inflation remains stubborn, which means mortgage rates may continue to move around rather than immediately falling. For buyers and sellers, strategy matters more than ever.

Markets like this aren't necessarily good or bad — they simply require a little more strategy. My job is to help you understand your options and make a decision based on your situation, not the headlines. My goal is to help you cut through that noise, understand what the numbers actually mean for you, and make a confident real estate decision when the time is right.

Get in Touch

You can reach me at:📞 513-912-4812 OR📧 Fill Out the Contact Form on the Website

-Ashley

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Local Market Snapshot

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Sources from the KW Market Update- Watch the original video and RPR.