The U.S. housing market is projected to enter a period of stability in 2026, marking a gradual recovery from the volatility of recent years. Noted economists largely agree that while a sharp housing crash is unlikely, the market is poised for a “Great Housing Reset”, characterized by slowing home price appreciation, easing mortgage rates, and a significant rebound in sales volume.
Here is a look at the consensus predictions for 2026, according to key economic sources:
Home Prices: Growth Decelerates
The good news for buyers is that the pace of home price appreciation (HPA) is expected to cool significantly. This deceleration, coupled with steady wage growth, is the primary driver for improved affordability.
Affordability Insight: Mark Fleming, Chief Economist at First American, notes that income is expected to rise faster than house prices, which should lead to an estimated 3% improvement in house-buying power by the end of 2026. (Source: Mortgage Professional America)
Mortgage Rates: Easing Toward Six Percent
A key factor in unlocking the market will be the gradual decline of the 30-year fixed mortgage rate. While rates are not expected to return to pandemic-era lows, the easing trend will entice “locked-in” sellers and boost buyer confidence.
Consensus View: Most economists predict that rates will continue to trend downward, averaging in the high 5% to low 6% range for 2026.
Fannie Mae projects the 30-year fixed rate will average 5.9% by the end of 2026. (Source: NerdWallet)
NAR’s Lawrence Yun forecasts an average rate of around 6.0%. (Source: Homes.com)
Morgan Stanley predicts the rate will settle slightly lower at 5.75% by year-end. (Source: Morgan Stanley)
Sales Volume: The Great Rebound
After several years of historically low transaction volumes, 2026 is anticipated to see a significant injection of market activity as lower mortgage rates prompt both buyers and sellers to re-enter the market.
NAR’s Optimism: Chief Economist Lawrence Yun projects the most aggressive rebound, forecasting a substantial 14% surge in existing-home sales (Source: NAR).
Fannie Mae’s Prediction: This source forecasts 4.46 million existing-home sales, an increase of 9.2% year-over-year (Source: Mortgage Research).
The increased sales volume will be fueled by both rising demand and a necessary increase in inventory, as more homeowners—even those with lower existing rates—choose to move forward with life changes.
What This Means for You
For prospective buyers, 2026 should offer greater stability, more inventory, and slowly improving affordability compared to previous years. For sellers, while competition may increase slightly with higher inventory, the market will see a much larger pool of qualified buyers able to afford a home.
