01/06/2026
HOUSING MARKET EXPECTATIONS 2026:
The 2026 housing market is expected to see a gradual rebalancing, with modest price growth, a slight decrease in mortgage rates, and an increase in home sales as inventory improves. This environment should slightly improve affordability, with more negotiating power tilting toward buyers in some areas.
2026 Forecast Highlights
Mortgage Rates: Rates are expected to slowly decline but remain above 6%, with forecasters like Fannie Mae predicting rates around 5.9% by year-end, and others such as Redfin and Realtor.com projecting an average of 6.3% for the year.
Home Prices: National home prices are anticipated to see modest appreciation, generally in the 1% to 3% range, which is slower than expected wage growth. This dynamic means real (inflation-adjusted) home prices may actually decline, improving affordability over time.
Home Sales & Inventory: Existing home sales are projected to increase by various estimates, with the National Association of Realtors (NAR) predicting a notable 14% rise nationwide as pent-up demand is released and more homeowners with low "lock-in" rates are motivated to sell by life events. Inventory levels are expected to continue their recovery, offering more choices for buyers.
Key Market Dynamics
Improved Affordability: The combination of moderating prices, slightly lower mortgage rates, and rising incomes means the typical mortgage payment as a share of income is expected to fall below the 30% threshold for the first time since 2022.
Regional Variation: The national outlook masks significant local differences. Markets in the Northeast may see stronger price growth due to persistent inventory scarcity, while some markets in the South and West that saw heavy new construction might experience price declines or a more balanced market.
Buyer/Seller Balance: The market is moving toward a more balanced state, away from the intense seller's market of the pandemic era. Buyers will find more options and negotiating room, while sellers who are realistic about pricing will be more successful.
Overall, 2026 is shaping up to be a year of "reset" and gradual normalization, rather than a dramatic boom or crash, rewarding careful financial planning over attempts to "time the market".
If you are thinking of selling your property, please reach out for a complimentary market analysis today.
Call or text: 802-745-9246.
