8 Predictions for the Housing Market in 2026

If you’ve been following the housing market over the past few years, you know the only guarantee has been uncertainty. Rates climbed to multi-decade highs, inventory tightened into a national squeeze, affordability took a hit, and millions of would-be buyers sat on the sidelines waiting for something to give.

Heading into 2026, a new pattern is emerging. The turbulence that defined the early 2020s has started to settle into something closer to a rhythm. The market isn’t suddenly “easy,” and the road ahead still has its curves, but the signals suggest a year that looks more balanced, more predictable, and, for many people, more approachable.

Based on the latest research from Fannie Mae, Freddie Mac, the Mortgage Bankers Association, CoreLogic, NAR, and multiple economic forecasts, here are eight predictions for what 2026 may hold for the housing and mortgage markets.

1. Mortgage rates will continue easing — slowly, not dramatically

Nearly every major forecast aligns on one thing: the era of 7-8 percent mortgage rates is fading.

Fannie Mae projects rates drifting into the mid-to-low 6 percent range by late 2026 (Fannie Mae Housing Forecast, Nov. 2025).
Freddie Mac and the MBA offer similar expectations, with the MBA estimating 6.3 to 6.6 percent by year-end 2026.

Why “slow easing” matters:
Rates aren’t expected to fall off a cliff. The Fed is projected to hold a semi-restrictive posture into much of 2026. But for buyers waiting for a crack of daylight, incremental relief may be enough to improve affordability, and for homeowners watching for refi opportunities, it could open the first meaningful window in years.

2. Home prices will continue to grow, but at a more sustainable pace

After years of whiplash, with first explosive growth, then mild cooling, price expectations for 2026 look refreshingly steady.

CoreLogic projects 2–3 percent home price appreciation nationally, tied closely to wage growth.
Zillow Research forecasts a similar range, noting that a gradual increase in inventory should help flatten out extreme price pressure.

This is not the frenzy of 2020–2021, nor the stagnation many feared in 2023–2024. Instead, 2026 may offer buyers something rare: a market where prices rise reasonably, not violently.

For sellers, that means stability. For buyers, predictability.

3. Inventory will improve, but not enough to erase the shortage

The U.S. is still short anywhere from 1.5 to 4 million homes, depending on the source (NAR, Harvard Joint Center for Housing Studies). No one expects that gap to close in 2026, but conditions should improve measurably.

Why?

Builders have accelerated single-family starts for three consecutive quarters (U.S. Census Bureau).
Many would-be move-up sellers who locked in very low percent rates are aging into life transitions where they must move.
Some homeowners who refinanced during the high-rate peak are expected to test the market again.

Inventory won’t feel “healthy,” but it will feel healthier, and that’s enough to shift the tone.

4. Affordability will still be tight — but heading the right direction

Improving affordability doesn’t mean housing suddenly becomes cheap. What it means is this:

Slower home price growth
Moderating mortgage rates
Slightly better inventory

Together, they will bring the affordability index closer to historic norms. Not close, but closer. The National Association of Realtors projects gradual improvement, with the largest benefits felt by first-time buyers who were shut out during the peak-of-peak conditions.

2026 probably won’t feel like a “buyer’s market,” but it may feel like the first year in a long time where the door isn’t locked.

5. Refinancing will return in meaningful waves

Most households who refinanced into ultra-low rates in 2020-2021 won’t budge unless rates fall below 4 percent again, which is something no forecast expects.

But millions of households bought or refi’d during the 2022-2024 period of elevated rates (5.5 to 7.5 percent), and for them, a drop into the low-to-mid 6s could be enough to trigger refi demand.
MBA forecasts a 35-40 percent increase in 2026 refi volume compared to 2025.

This won’t be a boom. But it will be a thaw, and for many families, a meaningful chance to reset their monthly costs.

6. Lending standards will loosen slightly as lenders chase volume

After years of tight standards and risk-averse underwriting, lenders are expected to ease certain overlays to remain competitive as purchase volume rises. Freddie Mac’s Q4 2025 lender survey found that 71 percent of lenders expect credit access to expand modestly into 2026.

This does not mean a return to pre-2008 behavior.
It means:

More products
More flexibility at the margins
Expanded offerings for credit-worthy borrowers who fall outside traditional boxes

Think: opportunity, not recklessness.

7. Construction and new builds will play a bigger role in balancing the market

The single-family construction pipeline continues to grow, with U.S. Census data showing a steady uptick in permits and completions. Builders pivoted aggressively during the high-rate environment, introducing:

Smaller footprints
More efficient floorplans
Alternative financing incentives

This trend is expected to accelerate in 2026, with builders providing 20-25 percent of available inventory in some markets, far above historic norms.

For buyers, this increases choice. For the market, it adds much-needed supply at a time when aging inventories and underbuilding have left lasting gaps.

8. The “location winners” of 2026 will look different than the last boom cycle

During the pandemic-era boom, Sunbelt metros dominated. But forecasts for 2026 show a shift:

CoreLogic and Moody’s Analytics expect Midwestern and Northeastern metros to show the strongest price stability.
Western markets with extreme 2021-2022 price growth may see flatter trajectories.
Secondary markets with strong job growth and reasonable prices such as Columbus, Raleigh, and Kansas City are projected to outperform high-cost coastal markets.

The headline:
2026 won’t crown one region. It will reward markets with balance, not hype.

Bottom Line: 2026 Looks More Navigable, But Not Effortless

If 2024 was the year of uncertainty and 2025 the year of recalibration, then 2026 may be the year the housing market finally finds its footing again.

Not a buyer’s paradise. Not a seller’s frenzy. But at least a workable market. One with clearer expectations, healthier inventory, steadier price trends, and mortgage rates that don’t steal the air from the room.

And in a landscape like that, the smartest move is simple: