US housing market 2026 is shaping up to be a turning point for buyers who have been priced out for years. After a prolonged slump driven by high mortgage rates and limited inventory, new forecasts suggest the market will finally begin to loosen. While no dramatic boom is expected, analysts say modest price growth, rising wages, and improving sales activity could make homes feel more affordable in real terms next year.
Key Points
According to a Bloomberg survey of nine housing market analysts, the US housing market 2026 will see price increases slow sharply while sales rebound for the first time since 2021. This shift marks a meaningful change after several years of historically weak transaction volumes and stubborn affordability challenges.
US Housing Market 2026 Shows Slower Price Growth
One of the most important developments in the US housing market 2026 outlook is the slowdown in home price growth. Analysts surveyed by Bloomberg predict a median home price increase of just 1.5% next year. That figure is notably lower than recent years and, more importantly, well below the expected growth in employee wages.
This gap between wage growth and home price appreciation is critical. When incomes rise faster than home prices, housing becomes cheaper in real terms. Even without a major drop in mortgage rates, this dynamic alone could improve affordability for many households.
Different forecasters have slightly varied views. Realtor.com expects prices to rise around 2.2%, while Redfin projects a 1% increase. Wells Fargo sees prices climbing 3.1%, and Capital Economics forecasts a 2% gain. At the high end, the National Association of Realtors expects prices to rise 4% in 2026, while the Mortgage Bankers Association is the lone group projecting a small price decline of 0.5%.
Despite these differences, the broader message is clear: price growth in the US housing market 2026 is expected to remain modest and far from the rapid surges seen during the pandemic-era buying frenzy.
US Housing Market 2026 Sales Expected to Rise
Home sales are also expected to improve in the US housing market 2026, marking a long-awaited reversal. Analysts predict existing home sales growth ranging from 1.7% to as high as 14%, with a median forecast of roughly 6.3%.
If realized, this would be the first annual increase in existing home sales since 2021. That year marked the peak of pandemic-driven demand, when mortgage rates were at historic lows and buyers rushed into the market.
The years that followed were far less encouraging. Existing home sales in 2023, 2024, and 2025 hovered near 30-year lows, weighed down by high borrowing costs and homeowners reluctant to give up low-rate mortgages. Even with a rebound in the US housing market 2026, analysts caution that sales volumes will still fall short of pre-pandemic norms.
Mark Zandi, chief economist at Moody’s Analytics, described the expected recovery as gradual. He said the housing market is unlikely to surge out of its downturn and instead will improve slowly, assuming the job market remains stable.
Mortgage Rates Likely to Stay Near Current Levels
Mortgage rates remain one of the biggest variables shaping the US housing market 2026. Rates declined in 2025 from above 7% to around 6.2%, offering modest relief to buyers and sellers alike. That drop helped encourage some homeowners to list their properties, even if it meant refinancing into higher-rate loans.
Looking ahead, most analysts surveyed believe mortgage rates will end 2026 close to where they are now. Forecasts generally cluster between 6% and 6.5% for 30-year fixed-rate mortgages.
Capital Economics holds the most cautious view, predicting rates could reach 6.5% if the Federal Reserve cuts interest rates only once next year. The firm expects sales to rise 4.6% and prices to increase 2% under that scenario.
On the more optimistic side, the National Association of Realtors sees mortgage rates falling to 6%. That outlook supports its forecast for a 14% jump in home sales and a 4% rise in prices, the strongest projections among the surveyed groups.
Despite these differences, analysts broadly agree that mortgage rates in the US housing market 2026 will not fall sharply enough to trigger a housing boom. Instead, stability appears to be the dominant theme.
Federal Reserve Policy and the Job Market
The Federal Reserve plays a central role in shaping expectations for the US housing market 2026. In 2025, the Fed cut interest rates three times in an effort to support the job market. Those moves raised hopes among real estate agents that lower borrowing costs could energize upcoming selling seasons.
However, analysts caution that mortgage rates do not move in lockstep with Fed rate cuts. As a result, even if the Fed continues easing policy, housing finance costs may remain relatively elevated.
The job market adds another layer of uncertainty. Zandi noted that widespread layoffs, particularly those linked to artificial intelligence adoption, could disproportionately affect younger workers. Because younger households represent a significant share of first-time buyers, job losses in this group could weaken housing demand and slow the recovery.
At the same time, strong employment growth would reinforce confidence in the US housing market 2026, helping buyers feel more secure about making long-term financial commitments.
Why Affordability Could Improve Without Big Rate Cuts
One of the more surprising takeaways from the US housing market 2026 forecasts is that affordability may improve even without major declines in mortgage rates. This improvement hinges on three factors: slower price growth, rising wages, and a gradual increase in housing supply.
As prices rise more slowly, buyers face less competition and fewer bidding wars. Combined with higher incomes, this dynamic reduces the share of earnings required to cover housing costs.
Additionally, slightly lower mortgage rates compared to recent peaks make monthly payments more manageable, even if rates remain well above pandemic-era lows. This balance could be enough to bring cautious buyers back into the market.
Still, economists emphasize that affordability gains will be incremental rather than dramatic. The US housing market 2026 is expected to improve gradually, not undergo a sudden transformation.
Industry Perspectives Reflect Cautious Optimism
Reactions from housing economists and industry groups reflect cautious optimism about the US housing market 2026. Lawrence Yun, chief economist at the National Association of Realtors, emphasized the dominant role mortgage rates play in shaping market outcomes.
He noted that if job losses were to increase, the Federal Reserve would likely respond with more aggressive rate cuts. Such a move could further support housing demand, even in a weakening economy.
Thomas Ryan, North America economist at Capital Economics, struck a more reserved tone. He argued that a much sharper drop in mortgage rates would be necessary to fully unlock pent-up housing demand. Without that, gains in the US housing market 2026 are likely to remain moderate.
Despite differing views, most experts agree that the worst of the housing downturn may be over. The coming year appears poised to deliver stability rather than volatility.
What Buyers and Sellers Should Expect in 2026
For buyers, the US housing market 2026 may finally offer a window of opportunity. Slower price growth, rising incomes, and steadier mortgage rates could improve purchasing power, especially for households that have been waiting on the sidelines.
Sellers, meanwhile, may find slightly better conditions as more buyers return to the market. While price appreciation may be limited, increased sales activity could shorten listing times compared to recent years.
Still, both sides should temper expectations. The market is not expected to return to the rapid growth or ultra-low rates of the early 2020s. Instead, 2026 looks set to reward patience and careful planning.
Conclusion
The US housing market 2026 is forecast to enter a phase of cautious recovery, marked by modest price growth, rising sales, and stable mortgage rates. While challenges remain, particularly around affordability and economic uncertainty, the balance of factors suggests gradual improvement rather than continued stagnation.
For the first time in several years, buyers may find that the market is moving slightly in their favor. As wages outpace home price growth and transaction volumes pick up, housing could become more accessible in real terms. The road ahead may be slow, but the direction appears more promising than it has been in some time.
