If you have been watching the housing market and wondering whether things will finally feel more manageable in 2026, you are not alone. Over the past few years, affordability has been the biggest hurdle for buyers and a source of hesitation for many sellers. High rates, limited inventory, and fast price growth made moving feel out of reach for a lot of people.
The outlook is starting to shift. Affordability improved in 2025 compared to the prior three years, and experts say that progress should continue into 2026. Their forecasts are based on three main factors shaping the market this year: mortgage rates, housing supply, and home price growth.
Mortgage Rates Have Already Come Down
Mortgage rates are no longer at their peak. Over the past year, rates declined by close to a full percentage point. That change may sound modest, but it can have a meaningful impact on monthly payments and overall affordability.
So what happens next. Forecasts suggest mortgage rates are likely to remain relatively stable and hover in the low 6% range throughout 2026 (see graph below):
Where rates go from here will depend on broader economic conditions, including job growth and decisions made by the Federal Reserve. What matters most for buyers and sellers is that rates are already lower than they were a year ago, creating a more workable environment for those planning a move in 2026.
- For buyers: lower rates help reduce monthly payments and can increase purchasing power. That can bring more homes back into reach.
- For sellers: rates in the six percent range may be the new normal. With built up equity, many homeowners can still make a move when the timing is right.
Inventory Continues to Improve
Housing supply made noticeable gains in 2025, with the number of homes for sale increasing by about 15%. As inventory improved, buyers gained something they had been missing for years: more choices, time to evaluate options, and room to negotiate.
Rising inventory also helped slow price growth, which plays an important role in improving affordability.
While the pace of inventory growth is expected to moderate, experts at Realtor.com project the supply of homes for sale should increase by another 8.9% this year.
- For buyers: that means more selection and stronger negotiating power.
- For sellers: accurate pricing will matter more than ever to attract serious buyers.
Home Prices Are Rising More Slowly
With more homes available, price pressure has eased. Over the past year, that shift has become clear. Most experts still expect home prices to rise nationally in 2026, but at a much slower pace. On average, forecasts call for prices to increase by1.6% in 2026 (see graph below):
With more homes available, price pressure has eased. Over the past year, that shift has become clear. Most experts still expect home prices to rise nationally in 2026, but at a much slower pace. On average, forecasts call for prices to increase by about 1.6 percent (see graph below).
That outlook runs counter to some of the more extreme predictions circulating online about prices falling sharply. The reality is more nuanced. Market conditions will vary widely by location.
Some areas may see prices rise more than the national average, while others could experience slight declines. Local supply, demand, and economic factors will make the difference. This is why working with a local agent who understands your market matters.
At the national level, slower and steadier price growth supports a healthier market. 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.”
- For buyers: this means fewer sudden price spikes and more predictable budgeting.
- For sellers: slower appreciation helps maintain equity while restoring balance to the market.
More Homes Are Expected to Sell
When lower rates, growing inventory, and steadier price growth come together, affordability improves. That is why experts expect more homes to sell in 2026.
As Mischa Fisher, Chief Economist at Zillow, says:
“Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand. Each group should have a bit more breathing room in 2026.”
The takeaway is simple. More people should be able to move forward with their plans this year. Conditions are creating opportunities that have not been available in quite some time.
Bottom Line
Affordability is not going to change overnight. But with several key trends working in the same direction, it should continue to improve gradually throughout 2026.
This year is shaping up to bring more balance, more predictability, and more flexibility than buyers and sellers have seen in years.
If you want to understand what these changes mean for your local market, let’s talk.
Vesta Schneider
Realtor®
Luxury Homes | Relocation | Investments
Keller Williams Realty McKinney
📞 302-530-7314
📧 vestaschneider@yahoo.com
