What to Expect for the 2026 Housing Market
Making predictions is always risky. Unexpected events can have unanticipated consequences. Based on trends in the market, we can make assumptions about how the real estate market will respond. 2026 is likely to be a more balanced real estate market in which homes may be on the market a little longer but result in sale prices close to their list prices. Neither the buyer nor the seller will have an overwhelming advantage. A modest increase in home values in the 2%-3% range is likely.
Rates: Many wish that mortgage rates would get back to the golden days of 2%. Unfortunately, those rates were an anomaly – when we look at rates on a historical basis those super low mortgage rates were unusual. They are not coming back. In 2025, rates came down and right now a low 6% is the norm. For 2026, it is likely that rates will come down a bit more but we shouldn’t expect big decreases.
New Mortgage Options: The Administration has been talking about a potential 50-year mortgage. Yes, it will take longer to pay back and earn equity. Payments on a monthly basis might not be that much lower. BUT, a 50 year mortgage might offer better debt to income ratios for prospective buyers who feel they may be lifetime renters. Most homeowners re-finance their mortgage or move before reaching the end of the mortgage term. No reason to expect the same would not be true for anyone taking a 50-year mortgage. If it allows more people who want to to buy their home, then great!
Inventory: For a variety of reasons, homeowners have been holding onto their property. We should see a greater number of homes, condos and townhomes being listed as the second quarter of the year rolls around.
Technology: The overwhelming majority of home searches are done using home search websites. Photos, videos and interactive floorplans are helpful in determining if a house may be a buyer’s perfect future home. Expect to see more options in which there is virtual staging of rooms with contemporary furnishings and before and after versions of a home to see what it might look like with different paint colors, with and without wallpaper or what a space looks like with changes to the interiors.
Renovated Listings: 2026 will continue to see newly renovated homes on the market. Investors are still a force in buying, renovating and selling homes. If my mailbox is any indication, postcards that market directly to homeowners with an offer for the house as it is (no need to make repairs, updates or showings) will continue to be of interest to some prospective sellers. A variety of websites also provide “cash offers” when homeowners inquire. For the segment of the buying population that prefers a “turn-key” home, there will be plenty of options on the market this year.
