In 2025, affordability was the best in three years. And experts agree that momentum will continue into 2026. And that’s based on their analysis of the key factors that will shape the housing market in the coming year: mortgage rates, inventory and house prices.
Lower mortgage rates are already available
Mortgage rates have already fallen from their peak. By some calculations, they have fallen by almost a full percentage point over the past year. And that’s a big deal, even if it doesn’t sound like it. But how low will they go? And do you have to wait until they come further down? Here’s your answer.
Predictions suggesting that they will remain pretty much where they are now and remain up in the air low 6% reach during 2026 (see graph below):
Where they go from here really depends on what happens with the economy, the labor market, and any monetary policy changes the Fed makes over the next year. Most importantly, they are already lower than a year ago, which is ideal if you are planning a move in 2026.
- For buyers: A lower rate reduces monthly payments and increases purchasing power. And that combination ensures that more people qualify for homes that previously seemed just out of reach.
- For sellers: It may be time to accept that 6-year rates are the new normal. And if you have to move, it is doable, especially with your own capital.
There are more options on the way
By 2025, the number of homes for sale will be about 15%. As inventory increased, buyers got back things they hadn’t had in years: options, time to consider those options, and bargaining power. This has contributed to the restoration of more balance in the housing market.
Not to mention that inventory gains are a big part of what has helped slow price growth – which in turn improves affordability.
Although stock gains are not expected to be as steep this year, experts say Realtor.com participation the supply of homes for sale should grow by another 8.9% this year.
- For buyers: That means even more choice and more negotiating power.
- For sellers: Pricing your home correctly is essential to attracting buyers.
House price growth is slowing to a more sustainable pace
With more homes for sale, there is currently not as much upward pressure on prices. And we’ve seen that happen over the past year. Yet the vast majority of experts Nationally, prices will continue to rise in the coming year, just at a slower pace. Average they say in 2026, prices will rise by 1.6% (see graph below):
And that is reassuring when you hear on social media that prices will fall. But here’s what you most need to remember about this. It will vary greatly from area to area.
So rely on a local agent for the latest news on what’s happening where you are. Prices will rise more sharply in some markets. Others may see prices drop slightly. It really all depends on the conditions of your local market
But overall, prices will continue to rise nationally. And that is good for the market as a whole. If Realtor.com explains:
“For home buyers and sellers, the shift signals a more balanced market– a situation in which price growth stabilizes, interest rate cuts provide breathing space and bargaining power subtly tilts in the direction of buyers.’
- For buyers: Expect more moderate price growth, and not the sudden and intense spikes of just a few years ago. That gives you fewer surprises and more predictability, making budgeting a lot easier.
- For sellers: This slower price growth restores balance without endangering your shares. And that is a victory.
More houses will be sold
All of this results in better affordability by 2026. And that’s exactly why experts say we should see more homes sold (and more people buying) this year.
Like Mischa Fisher, chief economist at Zillowsay:
“Buyers benefit from increased inventory and improved affordability, while sellers see price stability and more consistent demand. By 2026, each group should have a little more breathing room.”
The bottom line is that this year, more people can finally make their move. So the question is: do you want to be one of them? The market is giving you an opportunity you haven’t had in a while. Maybe it’s time to take advantage of it.
In short
Affordability will not suddenly change. But as several key trends work together, this should improve slowly and steadily over the coming months.
That’s exactly why in 2026 you should see a market with more balance, more predictability and more breathing room than you’ve had in years.
Would you like more information about the opportunities opening up in your local market? Contact an agent today.
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