2026 Housing Market Outlook: What Experts Predict for Home Prices & Mortgage Rates

Everybody was wondering what would happen in housing and with mortgage rates in 2026, so I laid out what the experts were saying and where I landed.

You could find just as many videos on YouTube predicting a crash. That is not what I think will happen. At the end of 2025, affordability was coming back in a big way in many markets. In parts of Florida and Texas, prices came down meaningfully from their peaks, and that brought a lot of people back to price points they had not seen in years. Rates had also dropped a lot since the start of 2025. Early December 2025, the average rate was between 6.25% and 6.3%, depending on credit, loan type and points. A few months earlier a lot of people were looking at rates near 7%, and rates had come close to 8% in 2023. The average buyer was paying somewhere between $250 and $700 less per month than they would have not long before.

On monetary policy, the Fed said it would end quantitative tightening on December 1. That is a fancy way of saying it was restricting the money supply, and it was one of the main contributors to higher borrowing costs. I also noted there was about a 70% chance of a Fed cut in December. The last few times they cut, mortgage rates went up, so I do not want anyone to assume it works the way the headline says. In my view, if the Fed starts easing money again it puts upward pressure on assets like real estate.

Forecasts from the National Association of Realtors and other economists I follow called for house prices to keep rising on average in 2026, with NAR's chief economist at about 4%, and some states higher and some lower. Mortgage applications and the number of people writing offers were at one of the highest points I could remember for the holidays. More inventory is giving buyers negotiating power. Sellers are paying closing costs and lowering their price, and I expected that to continue into January and maybe February.

One thing people miss is seasonality. If you graph the median price, it drops every year from around the end of October until the end of February, and people on YouTube call it a crash. But zoom out. The big appreciation usually starts in late February and runs to sometime in August, when more inventory comes on and buyers come out. That is why I thought 2026 would be a better year for buyers and for sellers who sat out the fourth quarter.

On rates, I did not expect big swings. I expected a slow trend downward, with most experts I follow saying rates around 6% for a while. To be honest with you, that is not a bad rate. Add higher insurance in fire and hurricane areas and it is still a lot more expensive than it used to be. But the days of buying a house and selling it six months later for 20% more are behind us. The market has returned to fundamentals, and there are still great opportunities for first-time buyers and investors.

I could be wrong. I do not think I am. If you want to talk through your timing, start with first-time buyer options or get your rate. MortgageOne is now licensed in 49 states.