2026 Home Price Projections

• Home price growth is expected to moderate, with most economists projecting 2%–3% annual appreciation, roughly in line with inflation.

• Prices are not expected to decline nationally, but rapid appreciation seen during the pandemic years is firmly behind us.

• Wage growth is projected to outpace home price growth, improving real purchasing power.

• Regionally, price behavior will vary:

  • South and West markets show better balance due to higher construction levels.

  • Northeast and Midwest continue to face tighter inventory and firmer pricing.

• New construction has introduced an unusual dynamic: in some markets, new homes are priced lower than resale homes due to builder incentives and geographic factors.

Bottom line: This is a healthier price environment—steady, sustainable growth without the pressure cooker conditions of recent years.

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Anticipation of Home Sales

• Existing-home sales are forecast to rise approximately 14% nationwide in 2026, marking a meaningful rebound.

• The long-standing “lock-in effect” is fading as life events—retirement, relocation, family needs—push more homeowners to sell.

• A 1% rate drop could result in roughly 500,000 additional home sales, assuming historical buyer behavior holds.

• Improved affordability, rising inventory, and stabilizing policy expectations are expected to help sales finally move above the stubborn 4-million annual sales floor.

• First-time buyers are projected to re-enter the market gradually, while baby boomers and all-cash buyers remain dominant forces.

Bottom line: More inventory plus lower rates equals movement—2026 is shaping up to be a year of renewed activity, not frenzy.

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Mortgage Rate Predictions

• Rates are expected to trend lower in 2026, with economists closely watching a move from the high-6% range toward approximately 6%.

• Even a 1% drop in mortgage rates is a major unlock, potentially expanding the buyer pool by about 5.5 million households nationwide.

• Lower rates are projected to reduce monthly payments for the first time since 2020, improving affordability even if prices rise modestly.

• While rates alone won’t fix the market, they are seen as the single most powerful catalyst for reactivating buyers sidelined over the past two years.

Bottom line: Falling mortgage rates won’t create a boom overnight—but they meaningfully expand opportunity and buyer confidence.

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Overall Takeaway

The consensus from leading housing economists is clear: 2026 is shaping up to be a rebalancing year—one defined by improving affordability, increasing sales activity, and stable home price growth. It’s not a return to the chaos of the pandemic market, but rather a calmer, more navigable landscape where informed decisions truly matter.