Real Estate Market Predictions 2026: Will Home Prices Increase or Decrease in the Coming Year?
The National Association of Realtors (NAR) has released its forecast for the housing market trends and factors in 2026, predicting a moderate and sustainable upward trend.
According to the NAR, existing-home sales are expected to accelerate by 11% in 2026, up from a 6% increase in 2025. This indicates a stronger buyer demand in the market. New-home sales are also projected to grow by about 5% in 2026, continuing the rebound in housing market activity.
Median home prices are expected to continue rising, with a forecasted increase of about 4% in 2026, following a 3% rise in 2025. This suggests a steady and moderate price appreciation rather than sharp increases or declines.
Mortgage rates are projected to ease slightly to around 6.1% in 2026, down from about 6.4% in late 2025. This modest decrease in rates is likely to improve affordability marginally and support increased home buying.
Job growth, with about 1.6 million new jobs forecasted in 2025, will underpin housing demand and contribute to market stability into 2026. The pent-up demand for housing is expected to be addressed progressively from 2025 through 2030, meaning inventory may improve modestly, relieving some supply constraints but still favoring sellers to some extent.
The overall market in 2026 is anticipated to be more stable compared to recent volatile years, with moderate price growth, increasing sales volumes, easing mortgage costs, and healthy economic fundamentals. Distressed sales and foreclosure risks remain low, preserving market confidence.
However, the housing shortage, pegged at nearly 4 million homes by Realtor.com Chief Economist Danielle Hale, is likely to persist in 2026. For potential buyers, it's advisable not to expect major price drops but to monitor mortgage rates closely.
For sellers, a market with modest price growth and active buyers could favor them. Some regions might outperform the national average in 2026 due to strong job growth, limited inventory, or high desirability. Considering new homes for possible financing perks and shopping around for the best mortgage deal could also be beneficial.
Investors looking for turnkey real estate opportunities in cities forecasted for strong performance in 2026 can turn to services like Norada. Focusing on stable investment areas with long-term growth potential could help stay ahead of national trends. On the other hand, areas with economic challenges or oversupply could see stagnation or slight declines in 2026.
In summary, the NAR's forecast indicates a moderate and sustainable upward trend in the housing market for 2026, driven by improving affordability, job growth, and increased sales, all balanced by a gradual easing of supply constraints. The housing market is expected to stabilize with modest growth in 2025, according to NAR Chief Economist Lawrence Yun, setting the stage for a promising 2026.
- The National Association of Realtors (NAR) predicts that existing-home sales will accelerate by 11% in 2026, indicating a stronger buyer demand in the real estate market.
- New-home sales are projected to grow by 5% in 2026, continuing the rebound in housing market activity.
- Median home prices are expected to continue rising, with a forecasted increase of about 4% in 2026.
- Mortgage rates are projected to ease slightly to around 6.1% in 2026, improving affordability marginally and supporting increased home buying.
- For potential investors looking for turnkey real estate opportunities, focusing on cities forecasted for strong performance in 2026 could be beneficial, with services like Norada offering such possibilities.
- In 2026, the housing shortage, estimated at nearly 4 million homes, is likely to persist, so it's advisable for potential buyers to closely monitor mortgage rates and consider new homes for possible financing perks and the best mortgage deals.
