4 Key Housing Market Trends for 2026 Every Buyer and Seller Must Know
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Gabrielle Olya
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Molly Sullivan
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After years of volatility, the U.S. housing market is poised for a shift in 2026. If you’re planning to buy or sell, understanding what’s ahead can help you make smarter decisions. Realtor.com’s latest forecast points to a more balanced market — but with some important nuances that could impact your strategy.
Here are four key predictions for the year ahead.
Mortgage Rates Are Expected To Average 6.3% in 2026
Mortgage rates finally began falling in the latter half of 2025, and Realtor.com experts predict that rates will hover around 6.3% for 2026.
“Lower mortgage rates will hopefully loosen up the housing market, which has been stuck in the mud in recent years,” said Joel Berner, senior economist at Realtor.com. “Lower rates mean larger budgets for buyers, who are more likely to find a home that meets their needs and that they can afford.”
Lower rates also mean less of the lock-in effect that has kept homeowners from selling the homes that they purchased when rates were lower, so there will be more homes on the market, he added.
Home Prices Will Be Up 2.2%, but Affordability Improves
Although Realtor.com predicts that home prices will rise by 2.2% in 2026, homes will actually be more affordable in 2026 compared to 2025.
“Lower mortgage rates are leading to more affordable monthly payments even as prices rise, because the relief from the cost of financing a home purchase outweighs the increase in cost of a higher purchase price at a national level,” Berner said. “Rates are falling faster than prices are rising, so monthly payments are coming down.”
Inventory Grows Nearly 9%, Shifting Power to Buyers
The number of homes for sale is expected to increase in 2026, with active listings up 8.9% year over year.
“Rising home inventory means more negotiating power for buyers and more competition for sellers,” Berner said. “Buyers will be able to take their time and find the right home for them without getting into bidding wars, while sellers may have to price their homes more aggressively to stand out in a crowded market. In all, it’s a power shift from sellers toward buyers.”
Falling Rents Help First-Time Buyers Save More
Rents are expected to drop by 1% in 2026, and even more in the South and West regions.
“We project that rents will continue to fall in 2026, making it a great year for prospective first-time homebuyers to continue saving up for a down payment on their first home in the future,” Berner said, “even if rates and prices don’t allow them to break into the market this year.”
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