Expert Forecasts Point to Affordability Improving in 2026

Curious about what the housing market will look like in 2026? You are not alone. For the past few years, affordability has been the biggest hurdle keeping many people from making their next move. Many buyers and sellers have been waiting for conditions to improve. The good news is that it is finally happening.

In 2025, affordability reached its best level in three years, and experts expect that momentum to continue into 2026. Their forecasts are based on key factors shaping the market next year, including mortgage rates, inventory, and home prices.

Lower Mortgage Rates Are Already Here

Mortgage rates have already fallen from their recent highs. Over the past year, some reports show rates dropping by nearly a full percentage point. That difference is significant, even if it does not sound like much.

So how low will rates go, and should you wait for them to drop further? Current forecasts indicate that rates will remain relatively steady, staying in the low 6 percent range throughout 2026 (see graph below).

Where mortgage rates go next will depend on the economy, the job market, and any changes in Federal Reserve policy throughout the year. The key takeaway is that rates are already lower than they were a year ago, which is ideal if you are planning a move in 2026.

For buyers: Lower rates reduce monthly payments and increase buying power. This combination allows more people to qualify for homes that previously felt out of reach.
For sellers: Rates in the 6 percent range may be the new normal, but moving is still achievable, especially if you have built equity in your home.

Even More Options Are on the Way

In 2025, the number of homes for sale increased by about 15 percent. As inventory grew, buyers regained advantages they had not seen in years, including more options, extra time to weigh those options, and stronger negotiating power. This helped bring greater balance to the housing market.

Inventory growth has also contributed to slowing price increases, which improves affordability for buyers.

While the gains in 2026 may not be as large, experts at Realtor.com predict that the supply of homes for sale could rise by another 8.9 percent this year.

For buyers: More inventory means more choices and greater negotiating power.
For sellers: Setting the right price will be essential to attract interested buyers.

Home Price Growth Is Slowing to a More Sustainable Pace

With more homes on the market, there is less upward pressure on prices, and that trend has been visible over the past year. Even so, most experts agree that home prices will continue to rise nationally in 2026, but at a slower pace. On average, they predict prices will increase by about 1.6 percent next year (see graph below).

This is reassuring if you have seen social media posts predicting a crash in home prices. The key point to remember is that trends will vary by location.

Working with a local agent is the best way to understand what is happening in your specific area. Some markets may see prices rise more than the national average, while others could experience slight declines. Local conditions are what really determine price movement.

Overall, home prices are expected to continue rising at the national level, which is positive for the market as a whole. As Realtor.com explains:

“For homebuyers and sellers, the shift signals a more balanced market—one where price growth steadies, rate relief offers breathing room, and negotiating power tilts subtly toward buyers.”

For buyers: Expect more moderate price growth instead of the sudden, intense spikes seen just a few years ago. This creates fewer surprises and greater predictability, making it easier to plan your budget.
For sellers: Slower price growth helps restore balance in the market without putting your equity at risk, which is a clear advantage.

More Homes Will Sell

All of these factors contribute to improved affordability in 2026. That is why experts expect to see more homes selling and more buyers entering the market this year.

As Mischa Fisher, Chief Economist at Zillow, explains:

“Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand. Each group should have a bit more breathing room in 2026.”

The bottom line is that more people will finally be able to make their move this year. The question is, will you be one of them? The market is presenting an opportunity that has been rare in recent years, and now may be the right time to take advantage of it.