Housing Market Forecast 2026: Affordability Improves as Rates Stabilize and Inventory Grows

Expert Housing Market Forecast: Why Affordability Is Set to Improve in 2026

Wondering what the housing market will look like in 2026? You’re not alone. After years of stretched budgets, high mortgage rates, and limited inventory, affordability has been the biggest obstacle keeping buyers and sellers on the sidelines.

The good news: housing affordability is finally improving — and experts expect that momentum to continue through 2026.
Driven by stabilizing mortgage rates, rising inventory, and slower home price growth, the market is shifting toward better balance and predictability.

Key Factors Improving Housing Affordability in 2026

Housing experts point to three core drivers shaping affordability in the year ahead:

• Mortgage rates leveling out

• More homes hitting the market

• Home price growth slowing to sustainable levels

Together, these trends are creating real opportunities for both buyers and sellers.

Mortgage Rates Are Lower — and Likely to Stay Stable

Mortgage rates have already fallen from their recent peak, dropping nearly a full percentage point over the past year. While that may not sound dramatic, even a small rate decline can significantly impact monthly payments and buying power.

What Experts Expect for Mortgage Rates in 2026

Most forecasts suggest mortgage rates will hover in the low-6% range throughout 2026. Where rates go next depends on broader economic conditions, job growth, and Federal Reserve policy — but the major takeaway is this:

Rates are already meaningfully lower than they were just a year ago.

What This Means:

• For buyers: Lower rates improve affordability and help more buyers qualify for homes that once felt out of reach.

• For sellers: Rates in the 6% range may be the new normal — and with accumulated equity, moving is still very achievable.

Housing Inventory Is Growing, Giving Buyers More Choice

Inventory made a meaningful comeback in 2025, rising about 15% year over year. That shift gave buyers something they hadn’t had in years: options, time, and negotiating power.

More Homes for Sale in 2026

According to Realtor.com, housing supply is expected to grow another 8.9% in 2026. While not as steep as last year’s gains, it’s enough to keep pressure off prices and improve affordability.

What This Means:

• For buyers: More selection and stronger negotiating leverage.

• For sellers: Pricing correctly will matter more than ever to attract motivated buyers.

Home Price Growth Is Slowing — Not Crashing

With more inventory available, upward pressure on prices has eased. While some social media headlines predict price drops, experts overwhelmingly agree on a different outcome.

2026 Home Price Forecast

Nationally, experts project home prices will rise about 1.6% in 2026 — a slower, more sustainable pace compared to recent years.

It’s important to note: local markets will vary. Some areas may see higher growth, while others could experience slight declines. That’s why working with a local real estate expert is essential.

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.”

What This Means:

• For buyers: Fewer sudden spikes and more predictable budgeting.

• For sellers: Equity remains protected while demand stays steady.

More Homes Are Expected to Sell in 2026

When lower rates, increased inventory, and slower price growth combine, affordability improves — and activity follows.

Experts anticipate more home sales in 2026, as buyers regain confidence and sellers find consistent demand.

As Zillow Chief Economist Mischa Fisher notes:

“Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand.”

Bottom Line: A More Balanced Housing Market in 2026

Affordability won’t change overnight — but the trend is clear. In 2026, the housing market is expected to offer:

• More balance

• Greater predictability

• More breathing room for buyers and sellers alike

After years of uncertainty, this may be the opportunity many have been waiting for.

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Want to know how these trends impact your local market?
Inventory levels, pricing, and demand vary by area — and local insight matters more than ever.

👉 Connect with a trusted real estate agent today to understand your options and take advantage of the opportunities emerging in 2026.