Expert Forecasts Point to Affordability Improving in 2026

If you’re wondering what the housing market will look like in 2026, you’re not alone. For the past few years, affordability has been the biggest challenge for buyers and sellers. High prices, elevated mortgage rates, and limited inventory caused many people to delay their plans.

The good news is that conditions are improving.

Affordability reached its best level in three years during 2025, and experts expect that progress to continue into 2026. Their outlook is based on three key factors shaping the market: mortgage rates, housing inventory, and home prices.

Mortgage Rates Have Leveled Out

Mortgage rates are already lower than their recent peak, dropping by nearly a full percentage point over the past year. While that may sound modest, it can significantly reduce monthly payments and improve buying power.

Most forecasts suggest rates will remain relatively stable in the low 6% range throughout 2026. Future movement will depend on economic conditions and Federal Reserve policy, but today’s environment is far more favorable than it was a year ago.

What this means:

• Buyers: Lower rates help stretch budgets and make qualifying easier.

• Sellers: Rates in the 6% range appear to be the new normal, and strong equity positions continue to support move-up opportunities.

Inventory Is Giving Buyers More Options

Housing inventory increased by about 15% in 2025, giving buyers more choices, more time, and renewed negotiating power. That added supply also helped slow price growth, directly improving affordability.

Looking ahead, Realtor.com projects inventory will grow by another 8.9% in 2026.

What this means:

• Buyers: More listings and better leverage in negotiations.

• Sellers: Correct pricing will be critical to attract attention in a more balanced market.

Home Prices Are Rising More Gradually

With more homes available, price growth has slowed. Most experts still expect prices to rise nationally in 2026, but at a modest pace—around 1.6% on average.

This doesn’t signal a market crash. Instead, it points to healthier, more sustainable growth. Local markets will vary, with some areas outperforming the national average and others seeing flatter conditions.

What this means:

• Buyers: Fewer sudden price jumps and more predictable planning.

• Sellers: Continued appreciation without putting existing equity at risk.

  
  

More Homes Are Expected to Sell

Lower rates, increased inventory, and steadier prices are improving affordability—and that should lead to more transactions in 2026. Buyers and sellers alike are expected to benefit from more consistent demand and improved balance.

Affordability won’t change overnight, but the direction is clear. With key market factors aligning, 2026 is shaping up to offer more balance, predictability, and opportunity than buyers and sellers have seen in years.

If you’re considering a move, this shifting market may be the opening you’ve been waiting for. Connect with a local real estate professional to understand how these trends apply in your area.