Realtor.com experts predict a more stable housing market in 2026, but it’s still early. Home prices are expected to grow slightly by 2.2% but mortgage rates are expected to average 6.3%, relieving some of the burden on affordability. Sales of existing homes should increase by almost 1.7% to 4.13 million, a modest but significant increase from the nearly 30-year low in 2025. For-sale inventory will also keep improving, rising by over 9% year-over-year.
The change indicates a more balanced market for both buyers and sellers, one in which price rise is steady, rate relief provides breathing room, and buyers have a slight advantage in negotiations. As salaries rise faster than inflation, housing affordability improves and the average payment portion of income falls below 30% for the first time since 2022.
Forecast Table — National (2026)
| Metric | Realtor.com Forecast (2026) | Realtor.com Full-Year Expectations (2025) | Historical Data (2024) | Historical Average (2013–19) |
| Mortgage Rates | 6.3% (avg); 6.3% (year-end) | 6.6% (avg); 6.3% (year-end) | 6.7% (avg); 6.7% (year-end) | 4.0% (avg) |
| Existing-Home Median Price Appreciation (YoY) | +2.2% | +2.0% | +4.5% | +6.5% |
| Existing-Home Sales (YoY/Annual Total) | +1.7% 4.13 million | +0.1% 4.07 million | -0.6% 4.06 million | +2.1% 5.28 million |
| Existing-Home For-Sale Inventory (YoY) | +8.9% | +15.2% | +15.2% | -3.6% |
| Single-Family Home Housing Starts (YoY/ Annual) | +3.1% 1.00 million | -4.3% 0.97 million | +6.9% 1.02 million | 0.77 million |
| Homeownership Rate | 64.8% | 65.1% | 65.6% | 64.2% |
| Rent Growth | -1.0% | -1.4% | -0.6% | +5.2% |
After an almost flat 2025, existing-home sales are predicted to increase by 1.7% in 2026. Existing-home sales will continue to be far below average despite this slight improvement since high prices and financing costs continue to stifle demand.
Existing-home sales in 2024 (4.06 million) will continue to be the record, 29-year low (in 1995, existing-home sales were 3,849,000) if home sales manage an increase in 2025 as predicted. In 2026, we anticipate an increase in home sales. However, since long-standing issues—diminished affordability due to high prices and persistently high mortgage rates—continue to burden homebuyers, the recovery will be small nationwide.
Many homeowners have a compelling motivation to stay put due to the mortgage rate lock-in effect, which is brought on by market rates that are significantly higher than the rates on current mortgages. In reality, according to recent data, the mortgage rate for four out of five homeowners is less than 6%. The share has steadily declined, and this trend is expected to continue in 2026. Turnover will therefore be low, and relocations will probably be prompted by life circumstances like changes in employment or family.
In 2026, it is anticipated that the average home sold would increase by 2.2%. These increases are in addition to the 2% increase that was recorded in 2025. However, it is anticipated that inflation would surpass these improvements, with consumer prices probably increasing by more than 3%. This implies that for the second year in a row, real (inflation-adjusted) home prices will decrease marginally.
Even while most buyers and sellers don’t notice a significant change, this dynamic—nominal prices rising but real prices falling—gradually increases affordability. In other words, it takes a smaller portion of each salary to purchase a home because the sticker price of homes keeps rising while total prices and wages rise more quickly. The gradual normalizing approach aids in the catch-up of buyer incomes.
As Mortgage Rates Remain Stable & Incomes Rise, Affordability Advances
Affordability is predicted to slightly improve in 2026 despite the anticipated increase in property prices. Mortgage rates gradually eased in the second half of 2025, falling into the low 6% level, following higher-than-expected interest rates for the majority of the year. We anticipate that the average 30-year fixed mortgage rate will stay approximately in this range throughout 2026, averaging 6.3%, as rising U.S. government debt and inflationary pressure are projected to be temporarily countered by slowing economic growth and the conclusion of the Fed’s quantitative tightening. The average 30-year fixed mortgage rate will decrease from an average of 6.6% for the entire year of 2025, even if this puts it on par with the final few months of 2025.
As home price growth slows and mortgage rates generally decline, the average monthly payment to purchase the median-priced home sold is predicted to decrease by 1.3% annually. This will be the first year-over-year decrease in average monthly payments since 2020. Additionally, rising incomes—which ought to surpass inflation—give consumers greater spending power, which reduces the portion of a paycheck that must be applied to a mortgage.
For the first time since 2022, when mortgage rates skyrocketed, the average home’s monthly payment is predicted to fall to 29.3% of median income. Even though the improvements are small, they represent a significant move in the direction of better homebuyer conditions.
The home inventory recovery persisted in 2025, despite the fact that some sellers chose to delist rather than accept unsatisfactory terms. October saw two years of steady growth in the number of active for-sale listings, and the rate of yearly unsold inventory recovery is probably going to be comparable to 2024. However, as the market gets closer to pre-pandemic levels, the rate of recovery has slowed, and we anticipate that this will continue in 2026.
For the third year in a row, we anticipate an 8.9% rise in active listings in 2026. However, as the market approaches pre-pandemic levels, the rate of improvement has slowed. Nationwide inventory levels are predicted to stay about 12% below pre-2020 averages by year’s end, which is better than the 19% difference in 2025 and the nearly 30% difference in 2024.
With an average of 4.6 months of supply throughout the year, the national housing market will continue to be in balanced territory in 2026. Nevertheless, as the balance of supply and demand alters due to a more significant increase in the number of homes for sale than homes sold, momentum in the housing market is anticipated to turn in favor of buyers. Although negotiating power is anticipated to increase, housing affordability will continue to be a barrier for many, particularly younger and first-time purchasers.
Rents Moderating Nationwide as Renters Seek Relief
In 2026, tenants should continue to benefit from falling rents as a strong pipeline of multifamily building increases the supply of rental properties and lowers rents. By the end of 2026, vacancy rates are anticipated to be close to, or possibly higher than, the long-term average of 7.2% recorded between 2013 and 2019 as more new units enter the market.
Rent mobility is predicted to increase as more tenants look for affordable homes or upgrades, as rents have been falling for more than two years and trends are predicted to continue in 2026. Markets like Las Vegas, Atlanta, Georgia, and Austin, Texas, which have seen the biggest price declines from their peaks, present chances for renters. Cross-market rental demand is anticipated to continue to be high in Nashville, TN, which is one of the top rental markets in the country, as well as in cities like Raleigh, NC, and Richmond, VA, which are both becoming popular choices for recent college graduates looking for affordability and career opportunities.
In 2026, the rental market is anticipated to be influenced by regional patterns. High prices will continue to be a major barrier to affordability for tenants in pricey, densely populated areas like New York City. It would take decades, not years, for rents in New York City to become really cheap, even with citywide rent freezes and consistent wage growth.
2025 experienced a slight slowdown in nominal economic growth as the economy adjusted to significant changes in immigration, trade, and taxation. After a period of above-trend growth, the recession brought real, after-inflation GDP growth back to trend. In 2026, a comparable on-trend economic performance is anticipated.
Headline inflation hit 2.3% in the spring, marking a key low point for inflation, which has been a problem for the economy for almost five years, according to the consumer price index. However, this improvement was not maintained, and when new tariffs impacted the price of goods, inflation increased once more—a tendency anticipated in 2026.
As affordability and inventory continue to rise in 2026, homebuyers’ negotiating power will somewhat increase, building on the gains they experienced in 2025. There will be significant regional diversity even if the national housing market will stay in a balanced area. At least seven significant housing markets have already entered buyer-friendly terrain in 2025, and that number is probably going to increase in 2026. Although this does not imply that the housing market will be “easy” for purchasers, experts do anticipate more sales in 2026, which indicates that more buyers will be able to effectively negotiate the market’s difficulties.
The post Housing Market Forecast Hints at More Balance, Inventory Recovery in 2026 first appeared on The MortgagePoint.
