2026 Housing Market Outlook: What Buyers and Sellers Should Expect

As 2025 winds down, many people are wondering what the housing market will look like next year. After several years of high mortgage rates, tight inventory, and affordability challenges, there’s finally some light at the end of the tunnel. According to Keeping Current Matters’ recent 2026 Housing Market Outlook, next year could bring the balance and movement we’ve all been waiting for. Let’s break down what experts are saying — and what it could mean for you.

1️⃣ More Buyers and Sellers Are Expected to Jump Back In

For much of 2024 and 2025, the housing market has been sluggish. Many homeowners didn’t want to sell and give up their low mortgage rates, while many buyers were priced out by high interest rates and limited inventory. But that may soon change. Experts predict 2026 will bring more transactions as both buyers and sellers re-enter the market. Life events — like job changes, marriages, and growing families — can only be postponed for so long. That pent-up demand is likely to fuel more movement in the year ahead. This rebound could also be fueled by growing consumer confidence, stabilizing inflation, and an improving job market. With wages still rising in many industries, more households could finally feel financially ready to make a move.

2️⃣ Mortgage Rates Could Gradually Decline

Mortgage rates have been one of the biggest barriers to affordability. After hovering around 7% for much of 2025, forecasters now expect them to ease into the low 6% range, and potentially even high 5% territory by late 2026. That doesn’t mean a sharp drop — think of it as taking the stairs down, not the elevator. But even small improvements can make a meaningful difference in monthly payments. For example, on a $400,000 mortgage, a 1% reduction in rates could save buyers around $250–$300 per month. That’s enough to pull many would-be buyers back into the market. Lower rates may also unlock more move-up buyers — homeowners who’ve been staying put because they didn’t want to trade their 3% mortgage for something double the rate. As rates normalize, more of these owners could finally make the move they’ve been delaying.

3️⃣ Home Prices Will Keep Rising — But at a Healthier Pace

Good news for those worried about a housing crash: experts don’t see one coming. Instead, home prices are expected to rise moderately in 2026. After several years of extreme price swings, next year’s growth is likely to be steady but sustainable, perhaps in the 2–4% range nationally, according to many forecasts. With more homes coming on the market and slightly better affordability, price growth should remain balanced. For sellers, that means continued appreciation — though not the double-digit spikes of 2021 and 2022. For buyers, it’s a relief: prices aren’t expected to soar out of reach, but neither are they projected to collapse. Remember, housing remains a long-term investment. Even moderate appreciation continues to build equity over time, making real estate one of the most reliable paths to wealth.

4️⃣ A More Balanced Market Ahead

The last few years have been anything but balanced. Bidding wars, skyrocketing prices, and record-low listings created a frustrating environment for nearly everyone. But in 2026, many analysts expect a healthier, more active market — one where buyers have more breathing room, sellers have motivated buyers again, and both sides can move forward with greater confidence. Inventory is projected to gradually increase, thanks to more homeowners deciding to list, plus new construction catching up to demand. This should help reduce the intense competition seen in recent years while still supporting values.

What This Means for You!

If You’re Planning to Buy:

Start preparing now. As rates ease, competition could increase again. Getting pre-approved, improving your credit, and watching your local market trends can help you act quickly when opportunities arise. You might also consider expanding your search radius or looking at slightly smaller homes to take advantage of more favorable affordability conditions.

If You’re Thinking About Selling:

The coming year could be a sweet spot. More buyers entering the market may give you the exposure and leverage you’ve been waiting for — but pricing your home realistically will still be key. Homes that are move-in ready and priced competitively will continue to sell fastest. Partnering with a knowledgeable agent can help you position your home strategically as the market picks up.

If You’re Just Watching the Market:

2026 may be a turning point toward normalcy — not a boom or a bust, but steady improvement and opportunity for those who are ready. Even if you’re not planning a move soon, it’s a great time to evaluate your equity, update your home’s value, and review your long-term goals so you’re ready when the timing feels right.

The Bottom Line

After a few “pause” years in real estate, 2026 is shaping up to be the year the market gets moving again. With mortgage rates trending lower, more buyers and sellers re-engaging, and prices holding steady, the housing market could finally find its balance. If you’ve been waiting for better conditions to make your next move — your moment might be just around the corner.