Could 2026 Be the Year the Housing Market Rebounds? Experts Say Yes — Carefully

After a few rocky years marked by sky-high mortgage rates and sluggish sales, there’s growing optimism that 2026 could bring a rebound to the U.S. housing market. Whether you’re buying your first home or trading up, real estate watchers say conditions may finally be shifting in your favor — but don’t expect fireworks just yet.

The National Association of Realtors (NAR) leads the hopeful chorus, forecasting a 14% surge in existing-home sales in 2026. If that number holds, it would mark a significant recovery from the market cooldown that followed the Federal Reserve’s interest rate hikes in 2022 and 2023.

What’s driving this more cheerful outlook? A few key factors:

• Stabilizing mortgage rates: After peaking above 7%, 30-year fixed rates are expected to settle around 5.9–6.0% by late 2026.
• Improving inventory: More sellers are expected to enter the market, increasing available listings by 5–10%, according to NAR.
• Steady job market: A strong labor market gives buyers the financial confidence to re-enter the home search.
• Modest price gains: NAR predicts home prices will rise around 4%, a more manageable increase than in recent years.

That said, not all analysts are quite so bullish.

A “Slow and Steady” Recovery

Housing giants Zillow and Fannie Mae see improvement ahead — but not the kind that makes headlines. Zillow is calling for a gradual uptick in sales, starting with a modest 0.6% gain in 2025, followed by more momentum in 2026. Their home price forecast is equally calm: up just 1.9% through 2025.

Fannie Mae, meanwhile, expects total home sales (new and existing) to grow by 7.3%, down from their earlier, more optimistic projections. They also anticipate rates easing into the 5.9% range, offering real monthly savings for buyers compared to the highs of 2023 and 2024.

Taken together, these forecasts suggest 2026 could bring a gentle market thaw — a return to more balanced conditions rather than a dramatic boom.

What It Means for Buyers

If you’ve been sidelined by high rates or low inventory, 2026 might be your chance to get back in the game.

Lower mortgage rates could save buyers hundreds of dollars per month, and a growing inventory means more homes to choose from — a welcome shift from the intense bidding wars of the pandemic era.

Pro tip: Start preparing now. Clean up your credit, build a down payment, and talk to a lender early. If rates drop below 6%, homes in your budget might go fast.

That 1970s split-level fixer-upper you dismissed last year? With a better rate and less buyer competition, it might start to look like a smart buy — especially if values rise modestly over the next few years.

What It Means for Sellers

Homeowners who waited out the market may finally see better selling conditions.

A livelier market means faster sales, more interest, and possibly higher offers. But don’t count on a return to 2021’s frenzy. Today’s buyers are cautious, and inflated prices won’t fly. Still, a well-priced, well-staged home — especially with modern upgrades or smart-home features — could attract solid attention.

Want to stand out? Declutter, clean, and consider small touch-ups like fresh paint or updated lighting. You don’t need a full renovation to make an impact.

No Crystal Ball, But a Clearer Picture

Forecasts aren’t guarantees. The direction of interest rates still depends on the Federal Reserve, inflation trends, and global events. And while more inventory helps, affordability remains a challenge in many regions.

Still, after several years of volatility, 2026 is shaping up to be a more stable and accessible year for both buyers and sellers. The market may not boom, but it’s looking more balanced — and that’s good news for just about everyone.