11/21/2025
Approaching 2026: What to Expect in the Real Estate Market
Home affordability remains a major challenge across the U.S., but 2026 is shaping up to bring modest recovery and increased sales. That said, we won’t see an overnight market balance. Let’s break down three key factors shaping the year ahead:
Mortgage Rates: Modest Relief
The 30-year fixed mortgage rate is expected to average around 6% in 2026, potentially dipping into the high 5% range by year-end. While we’re not returning to pandemic-era 3% rates, even a slight decline can significantly boost purchasing power and lower monthly payments. This shift could also motivate homeowners locked into low rates to list their homes, unlocking more inventory and opportunities for buyers.
Home Prices: Slower Growth, Still Market-Dependent
A nationwide housing price crash isn’t on the horizon. Instead, prices are projected to grow at a slower, healthier pace—around 2% to 4% annually. Real estate, however, is hyper-local. In some markets, like the Main Line suburbs of Philadelphia, demand remains intense, with homes attracting multiple offers and selling over asking, even during quieter months like November.
For homeowners, this means your equity is secure, with prices cooling but not collapsing. For buyers, waiting for a steep drop may not pay off. Limited supply and steady job growth will continue to support home values, so acting sooner rather than later could be the smarter move.
Supply and Sales: A Rebound Ahead
Lower rates are expected to spark a rebound in home sales, with some forecasts predicting a 10%-14% increase. As more homeowners move past their “rate lock” and list properties, inventory will grow. However, this won’t entirely ease competition—pent-up buyer demand will likely surge alongside new listings. To stay competitive, it’s critical to work with a great realtor and get pre-approved early.
The bottom line? 2026 won’t bring a dramatic reset, but it does signal progress. Whether you're buying or selling, preparation and timing will be key to navigating the market ahead.