5 States Expected To Benefit Most from Lower Mortgage Rates by 2026
Written by
Heather Altamirano
Edited by
Amen Oyiboke
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Anyone who has tried to purchase a home over the past few years knows the challenges buyers face. Between high interest rates, soaring house prices, low inventory and costly bidding wars, it’s been a wild and unpredictable ride. But things are starting to shift.
According to new data from Realtor.com, major cities like Denver, Austin, and Seattle now have more inventory, which means good news for buyers. Not only do they have a bigger selection of houses to choose from, but they also have a bit more leverage when negotiating.
However, there could be more exciting things to look forward to as a buyer.
Mortgage rates are currently down, hovering around 6.35% for a 30-year fixed loan and 5.5% for a 15-year loan, as of September 11, 2025, according to Freddie Mac. However, rates could be lowered even further. The Fed is expected to cut the rate by 25 basis points in mid-September, Reuters reported. Meanwhile, CME Group’s FedWatch predicts rates could fall to 4.25% to 4.50%.
Reduced interest rates would give homebuyers an advantage, and according to Yawar Charlie, director of estates at Christie’s International Real Estate of Southern California, there are five states that would be more affordable due to lower mortgage rates.
Georgia (Atlanta Metro)
The median sold home price in Atlanta is $413,000. People with an income of less than $100,000 are getting pushed out of the city, but Charlie explained that Atlanta is poised for serious movement if rates dip.
“A small rate shift reopens the door for thousands of buyers,” he said. “Home prices here haven’t budged much — in fact, there’s been only about a 1.4% yearly increase recently — plus inventory is rising.”
Homes are staying on the market longer, and more are getting price cuts.
“When mortgage money loosens up, I fully expect buyer activity to ignite again,” he said.
Texas (Dallas Metro)
Dallas is another big winner — population and jobs are booming, yet buyers have been rate-shocked.
According to Charlie, “Inventory is up by approximately 60% from the average, which is the most selection this market has seen in a decade.” He explained, “Suddenly, at 6%, homes that felt out of reach start penciling out. Think of it like financial Botox: a little tweak makes a big difference.”
Minnesota (Minneapolis Metro)
Minneapolis is a city that has it all-from good food, Midwest hospitality, and beautiful scenery, it’s an area you shouldn’t “sleep on,” Charlie said.
“It’s one of the metros poised for a rebound,” he explained. “If rates drop, inventory that’s been languishing starts moving, and affordability is much less punishing in a market where buyers are value-driven.”
The market is balanced, and you better believe those listings will vanish once rates dip.
Ohio (Cleveland Metro)
Cleveland has been a strong seller’s market with houses being sold within a month of being listed, per Redfin, but buyers get ready. Charlie said it could be a great time to purchase.
“Cleveland benefits in a similar way — steady demand, rate-sensitive buyers,” he said. “That sub-7 percent rate gives breathing room and pushes fence-sitters into action. In a market already more affordable than the coasts, a small dip makes homes even more attainable.”
Missouri-Kansas (Kansas City Metro)
Kansas City’s housing market is slowly shifting towards favoring buyers. Inventory is up, houses are taking longer to sell and price cuts are starting to happen more, but it’s not a buyer’s market yet, per Realtor.com. However, that could change.
“Kansas City is a thriving metro with buyers itching to act,” said Charlie.
If rates drop, that would help fuel a rebound.
“Downtown residential population has quadrupled in recent years, and occupancy rates are in the upper 90%,” he said. “Add improving rates and watch the market accelerate.”
Buyers have been priced out, waiting for inventory to become more available and for interest rates to decrease. This could be the time when those on the sidelines get back in the game.
“By 2026, mortgage rates around 6% may not look like fireworks, but trust me — they’ll light up housing markets like Atlanta, Dallas, Minneapolis, Cleveland, and Kansas City. For buyers, it’s a green light, and for sellers, demand heats up again,” Charlie said.
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