Housing market predictions for 2026: What buyers, renters, and homeowners can expect

If you’ve felt sidelined by the real estate market in years past, it’s fair to wonder whether 2026 finally looks different or whether it’s just another version of the same frustrations. The short answer is that the market does look calmer heading into 2026, but not dramatically cheaper or easier. Expert housing market predictions for 2026 suggest a market where preparation, flexibility, and local conditions are more crucial than chasing the perfect moment to buy, sell, or relocate.

Mortgage rates are lower now than they were at their recent peak. That part isn’t up for debate. What’s harder to pin down is how much relief that actually brings.

As of Dec. 11, 2025, the average 30-year fixed mortgage rate sat at 6.22%, according to Freddie Mac. That’s progress compared to rates in 2023 and early 2024, but still expensive relative to the rock-bottom pandemic rates that are now in the rearview mirror.

Looking ahead to 2026, expert mortgage rate predictions largely agree on the direction, but not on the specifics. Many expect mortgage rates to go down in 2026. Zillow and Realtor.com point to mortgage rates in the low- to mid-6% range as inflation continues to cool. In its November Housing Forecast, however, Fannie Mae predicts that the 30-year rate will hit 5.9% by the end of next year.

What’s striking is how restrained those projections are. No one is talking about a return to mortgage rates in the 3% range. Not seriously, anyway. That era appears to be over, at least for now.

Unfortunately, small rate drops may not feel as helpful as they sound. Moving from the mid-6% range to something closer to 6% can reduce a monthly payment, but it doesn’t erase the reality of higher home prices, property taxes, or homeowners insurance costs. Data from Zillow shows that lower rates could pull more buyers back into the market in 2026. Whether those buyers feel comfortable once they start running the numbers is another question.

In practice, this leaves buyers in a familiar spot. Rates may drift lower. Or they may stall. Either way, waiting for a perfect number can easily delay your home-buying process. If you’re financially ready to buy a home, consider doing so sooner rather than later, as this allows you to start building equity in the house.

If you’re waiting for home prices to fall sharply in 2026, the data suggests that’s unlikely.

Most major housing forecasts indicate a market that’s slowing down, rather than reversing. Zillow’s latest outlook projects modest price growth, with national home values expected to rise about 1.2% in 2026. Redfin’s forecast falls within a similar range, predicting roughly 1% year-over-year growth as part of a gradual reset rather than a correction.

The reason prices remain resilient comes back to supply. Even as listings improve from recent lows, housing inventory still hasn’t returned to pre-pandemic levels.

That shortage isn’t uniform. In some markets, inventory has rebounded faster. In other areas, particularly across parts of the Northeast and Midwest, Realtor.com data shows listings still lag well behind 2019 levels. In those areas, competition hasn’t disappeared, even if it’s less intense than it once was.

For buyers, slower price growth can feel like a downturn after years of rapid gains. In practice, it often just means prices stop rising as quickly. With supply still tight in many areas, a nationwide collapse simply doesn’t align with the data.

Rental housing absorbed some of the affordability pressure last year, especially as new apartment supply came online.

“Housing affordability was a significant challenge in 2025 as Americans faced high, stubborn interest rates and rising prices that added pressure to monthly bills,” George Ratiu, vice president of research at the National Apartment Association, said in an email. “The year brought a noticeable number of new apartments to the market,” particularly across the South and Southeast, he said, which pushed vacancies higher and led to softer rents and more concessions.

That extra supply changed the dynamic for many renters. In some places, it meant negotiating renewals. In others, it meant walking away from a lease and finding something cheaper down the street.

Ratiu expects developers to slow construction in 2026. Cities that have built heavily in recent years, including Austin, Phoenix, Orlando, Denver, and Dallas, may continue to offer incentives. In parts of the Northeast and Midwest, where construction has lagged, rents could firm up more quickly.

Even if mortgage rates ease, high home prices mean renting will remain the more realistic option for many households trying to save. According to housing market predictions for 2026, renting is increasingly looking like a strategy rather than a setback.

This is where many 2026 housing market predictions begin to fall apart a bit.

On paper, the housing market already appears more favorable to buyers than it did a few years ago. Realtor.com’s November 2025 market data shows the typical home spent about 64 days on the market, roughly three days longer than a year earlier — the 20th straight month of year-over-year increases in time on market. Meanwhile, Redfin’s October national housing data highlights a market where sales and listings have barely moved, a sign that homes aren’t selling as quickly as they did during the pandemic-era frenzy.

That sounds like a buyer’s market. It isn’t — at least not everywhere.

Inventory tells the rest of the story. Realtor.com data shows that while the number of homes for sale has increased from recent lows, supply in many markets still hasn’t caught up to pre-pandemic levels. In those local markets, sellers don’t need to chase buyers. Move-in-ready, well-priced homes still attract eager buyers, and sellers know it.

Redfin’s data paints a different picture in markets that built housing aggressively. There, homes tend to linger longer, sellers face more competition, and buyers have more room to negotiate — not on price, but on repairs, closing costs, and financing terms.

This is where national housing market predictions become less useful. Two buyers shopping at the same time and with similar budgets can end up with vastly different experiences depending on where they look. One may negotiate thousands off the list price or secure seller concessions that translate to serious savings. The other may lose out to a cash offer and wonder what all the talk about buyer leverage was supposed to mean.

That disconnect is likely to define 2026 more than any single headline. The market isn’t tilting cleanly in one direction. It’s fragmenting. That means working with real estate and lending professionals who know your local market — ones who can connect the pieces to help you build a complete and financially sound homeownership picture — could be more important than ever in the year ahead.

For renters hoping to buy in 2026, preparation matters as much as the market, said Neil Brooks, president of NewDay Home and a real estate professional with more than 25 years of experience.

Brooks encouraged renters to start by reducing their monthly payment obligations and paying down high-interest debt, especially credit card debt. Lenders closely monitor credit scores and payment histories. New debt or major purchases can quickly shrink your borrowing power.

Timing also matters. Mortgage preapprovals typically last 30 to 90 days, and hard credit checks can temporarily lower scores. “Only seek pre-approval when you’re ready to actively start house hunting,” Brooks said.

He also expected underwriting to remain more flexible for first-time home buyers in 2026. Recent changes at Fannie Mae removed a long-standing minimum credit score benchmark, which could help borrowers with limited or nontraditional credit histories qualify.

For many renters, the biggest hurdle is still up-front costs. Brooks said that down payment assistance programs and loan options that allow buyers to finance closing costs, such as VA loans, may help bridge that gap.

For buyers aiming to own in 2026, small moves can translate to big progress on their homeownership journey.

Gabriel Shahin, CEO and founder of Falcon Wealth Planning, said the starting point is less about hitting a perfect number and more about getting the basics right. That usually means paying down unsecured debt, building savings, and taking a hard look at monthly cash flow. For many first-time home buyers, the reality is that a future mortgage payment will be higher than their current rent. It’s helpful to know this now, not after an offer is accepted.

Shahin encouraged buyers to think beyond the down payment. Cash reserves also matter. Holding three to six months’ worth of expenses in savings can make the difference between comfortably qualifying for a mortgage and feeling stretched. He also urges buyers to knock out credit card balances with interest rates north of 10%, which can quietly drain cash flow even when income looks solid on paper.

One exercise Shahin recommended sounds simple, but it’s telling. Try setting aside the full projected housing payment — including taxes and insurance — each month, well before applying for a loan. For some buyers, that test builds confidence that a monthly mortgage is doable. For others, it’s a wake-up call that savings or income might need an upward adjustment. Either outcome is useful.

Income alignment also plays a role. As a rough planning tool, Shahin suggested multiplying a monthly payment you feel comfortable with by about 2.25 to estimate the gross income needed to support it, then adjusting for car payments or other ongoing debts. It’s not a lender formula. It’s really more of a gut check to make sure a future mortgage payment won’t strain your finances and cause you stress.

Use our home affordability calculator below to see how much house you can comfortably afford based on your current income and debts. The calculator will also reveal when the price range will become stressful for your financial situation.

However, f you’re feeling behind financially, don’t worry. Shahin emphasized progress over perfection. The goal isn’t to be financially flawless. It’s to feel ready so that when the right opportunity and house come along, you’re not starting from scratch.

The conversation heading into 2026 looks different for homeowners than it does for buyers or renters. Many owners are sitting on a sizable amount of home equity. Many are also sitting on low mortgage rates they don’t want to give up. That tension shapes almost every decision right now.

Some homeowners view easing rates as an opportunity to revisit plans they’ve put off, whether that’s moving, downsizing, or refinancing their mortgages. Others run the numbers and quickly decide that staying put still makes more sense. Giving up a low rate, even for a better-fitting home, can be a tough decision.

But what about inventory? Data from Zillow in the third quarter of 2025 showed that inventory levels are rising from the “empty shelves” levels seen during the pandemic-era buying frenzy. That sounds optimistic, but Zillow found there’s still a 17% inventory shortfall compared to pre-pandemic times. At the same time, Redfin notes that inventory growth has slowed and new listings have stalled. Both data sets point to an overall supply that remains constrained even as conditions become slightly more favorable for sellers to test the market.

What complicates things is the cost of the next move. Higher home prices, elevated property taxes, and rising homeowners insurance premiums can make a “trade-up” feel less appealing once everything is on paper. In some cases, homeowners realize that the house they already own, imperfections and all, still offers the best financial outcome.

That’s why national housing market predictions for 2026 tend to matter less for homeowners than personal math. Equity, replacement costs, lifestyle needs, and long-term plans will likely outweigh whatever the broader market is doing. The key to your homeownership journey will be to build a buying plan that aligns with your finances and goals.

Housing forecasts tend to sound more confident than they really are.

Most of the outlooks for 2026 line up in broad ways. Mortgage rates could drift lower. Prices may stop climbing so fast. Inventory might improve a bit. That’s helpful context, but it’s also typically where the certainty ends.

For many people, forecasts serve a quieter purpose. They help explain why the market feels the way it does. Why listings linger in one city and disappear in another. Why one buyer negotiates and another doesn’t. They’re less useful for telling someone exactly when to act.

That’s why most real decisions still come back to the same things, regardless of the outlook: monthly payments, cash reserves, job stability, and how long you expect to stay put. The forecasts provide background noise. Ultimately, your math and the trade-offs you’re willing to make matter more than anything else.

Laura Grace Tarpley edited this article.