Economists expect a rosier outlook for home sales in 2026, with predictions for increased transactions, modest price growth, and gradual improvements in affordability driven by stabilizing mortgage rates and rising inventory.

2026 Housing Market Forecast

The general consensus among economists is that the housing market is moving toward a more balanced state, sometimes characterized as a “reset” rather than a dramatic rebound.

Home Sales: A significant increase in home sales is expected. The National Association of Realtors (NAR) forecasts a 14% increase in existing home sales, while other sources like Zillow and Redfin predict more modest gains of around 4.3% and 3%, respectively. This growth is largely attributed to pent-up demand being released as affordability gradually improves.
Home Prices: Home price appreciation is expected to be modest, with national forecasts generally ranging from 1.2% to 4% growth. Prices will likely not fall, and the slower appreciation rate coupled with wage growth should help improve overall affordability.
Mortgage Rates: Rates are anticipated to decline slightly and stabilize, generally averaging between 6% and 6.4%. While this is still above pandemic-era lows, it represents an improvement from 2025 levels and is expected to attract more buyers back to the market.
Inventory: The number of homes for sale is expected to continue its gradual recovery, offering buyers more choices and slightly more negotiating power. However, inventory levels will likely remain below pre-2020 norms, preventing any major price drops.

Overall, the market is expected to become less frenetic, rewarding patient and financially prepared participants. Buyers are advised to focus on their personal financial readiness rather than trying to perfectly time the market.