(NewsNation) — Buyers and sellers spent 2025 locked in a stalemate, but 2026 could mark the beginning of a long-awaited return to normal in the housing market.
“After a challenging period for buyers, sellers, and renters, 2026 should offer a welcome, if modest, step toward a healthier housing market,” Realtor.com chief economist Danielle Hale said in a recent forecast.
Redfin has dubbed 2026 “The Great Housing Reset,” calling it the start of a “long, slow recovery.” While that shift won’t make homebuying broadly affordable right away, the online brokerage expects some relief with incomes outpacing home-price growth next year.
Elevated mortgage rates and high prices sidelined many buyers in 2025, but that softer demand has allowed inventory to rebuild after pandemic-era bidding wars drained supply. Sellers, meanwhile, held onto their rock-bottom mortgage rates, often choosing to pull listings rather than accept a lower offer.
Add in economic uncertainty and historically weak consumer sentiment, and the 2025 market moved at a crawl.
Here’s where housing experts see mortgage rates, home prices and sales heading in 2026.
Mortgage rates likely to stay around 6%
Predictions for the average 30-year fixed rate in 2026:
- Redfin: 6.3%
- Realtor.com: 6.3%
- Zillow: Above 6%
- National Association of Realtors: 6.0%
- Fannie Mae: 6.0%
Mortgage rates are expected to drift lower in 2026, but anyone waiting for a major drop will likely be disappointed.
Most forecasts put the average 30-year fixed rate in the low-6% range — a modest improvement from around 6.6% this year.
Redfin said rates may dip below 6% “occasionally,” depending on the Federal Reserve’s moves, but doesn’t expect them to stay under that level for any “meaningful period.”
The 30-year fixed rate hit a 2025 low of 6.17% in late October, but with the Fed’s rate cuts largely priced in beforehand, further declines haven’t materialized.
Buyers should expect next year’s rates to look a lot like today’s — better than the highs of recent years but still well above the roughly 4% average seen from 2013 to 2019.
Affordability expected to improve
Redfin and Realtor.com both expect affordability to improve next year, with incomes growing faster than home prices.
That hasn’t happened for a sustained period since the aftermath of the financial crisis, according to Redfin, which sees wages rising 4% in 2026 versus a 1% increase in the median home sale price.
A 1% gain would represent a dramatic slowdown from 2021, when home prices surged 16%. Back then, mortgage rates hovered around 3% and bidding wars were common. Today, sellers vastly outnumber buyers and elevated mortgage rates are keeping many on the sidelines — boosting inventory and slowing price growth.
Still, many homeowners are choosing to pull their listings rather than accept lower offers, a key reason prices aren’t expected to fall despite cool demand.
If mortgage rates edge lower and incomes grow as expected, 2026 could bring a return to the 30% affordability threshold. Realtor.com forecasts the monthly payment on a typical home to fall to 29.3% of median income — the first time below the 30% benchmark since 2022.
“The path back toward historic levels of affordability will be gradual, but 2026 takes a solid step in the right direction,” Hale said.
Northeast, Midwest stay hot while the Sun Belt keeps cooling
Housing markets most likely to heat up in 2026 (Redfin)
- New York City suburbs
- Syracuse, NY
- Cleveland, OH
- St. Louis, MO
- Minneapolis, MN
- Madison, WI
Housing markets most likely to cool down in 2026 (Redfin)
- Nashville, TN
- San Antonio, TX
- Austin, TX
- Fort Lauderdale, FL
- West Palm Beach, FL
- Miami, FL
Buyers regained leverage in 2025, but not everywhere, and those regional divides are expected to persist next year.
Major cities across once-booming pandemic destinations Florida and Texas have seen price growth stall and now lead the nation in “stale listings” — homes sitting on the market for more than 60 days.
Redfin sees the Sun Belt slowdown continuing in 2026, driven by concerns over natural disasters, soaring insurance costs and pandemic-era remote workers returning to office locations elsewhere. A surge of new construction in recent years has also tamped down price growth in Florida and Texas.
Meanwhile, Northeast and Midwest markets are expected to remain hot next year, with limited inventory and steady demand keeping competition elevated.
Realtor.com’s recent housing report found that 17 of the top 50 metros continue to lag at least 25% below their pre-pandemic inventory norms — led by Hartford, CT (-74%), Chicago, IL (-57%) and Providence, RI (-55%).
Among the largest U.S. metros, Realtor.com expects home prices to rise the most in Toledo, OH (+13.1%), Syracuse, NY (12.4%) and Scranton, PA (10.9%) in 2026. Prices are forecast to fall the most in Cape Coral, FL (-10.2%), North Port, FL (-8.9%) and Stockton, CA (-4.1%).
Home sales could finally pick up after sluggish stretch
Home sales are expected to rise after a sluggish 2025, but economists are split on how much.
The National Association of Realtors is projecting a 14% jump in existing-home sales in 2026, thanks to easing mortgage rates and continued job gains.
“Next year is really the year that we will see a measurable increase in sales,” Lawrence Yun, NAR’s chief economist, said at a recent forum.
Such a rebound would be a welcome jolt for a housing market that spent much of 2025 in gridlock — with buyers sidelined by high prices and elevated mortgage rates, and sellers clinging to their ultra-low pandemic-era loans.
Last spring saw the smallest share of homes selling above asking price since 2020, and the typical sale closed nearly $30,000 below the typical list price, according to Redfin.
But data suggests the so-called “lock-in effect” is starting to ease, and nearly one in five homeowners with a mortgage now have a rate of at least 6%, the highest share since 2015.
Redfin, Realtor.com and Zillow expect existing-home sales to rise next year — but by far less, suggesting more of a reset than a true rebound.
- Zillow: +4.3%
- Redfin: +3%
- Realtor.com: +1.7%
“Years of limited inventory and high mortgage rates have created a pent-up demand to move that should start to release as affordability improves,” Zillow wrote.
Realtor.com said its modest estimate reflects the expectation that high prices and elevated mortgage rates will continue to be barriers for buyers.