How to Buy a House in 2026

Mortgage rates just hit their lowest level in more than a year, and housing demand is picking up. This was my video on how to buy a house in 2026, and I want to give you the plan I gave there.

First, the facts as of early January 2026. Freddie Mac posted an average rate of 6.15%, the lowest since October 2024. It was not that long ago that rates were over 7%, and they touched 8% a few times since 2021. For most buyers, the difference between where rates were a year ago and today is somewhere between $300 and $1,000 in a monthly payment. Pending home sales were at their highest since early 2023, during a time of year when we usually do not see that. Prices did not crash in 2025, even though a lot of people called for it. The forecasts I was seeing, including the National Association of Realtors, predicted a different spring. Their chief economist expected 14% more transactions in 2026 (NAR later cut that forecast to about 4% in April 2026, so treat any forecast as a snapshot), and economists were predicting about 4% to 6% appreciation.

I also want to be honest. Housing is still unaffordable for many first-time buyers. For it to become affordable again, we would need a ton of new inventory and prices down 20% or more, and I do not see that happening with insurance costs where they are.

So here is what I told buyers to focus on. One, stop waiting for lower interest rates. When lower rates come, prices tend to move up. Build your plan around about a 6% rate and treat anything better as a bonus. Two, have a strategy to win with the seller. A lot of sellers in January were willing to make a deal, and many paid closing costs, which can help you buy the rate down. Look at temporary buydowns, and budget for insurance, property taxes and utilities, not just the rate. Three, train for the payment. If your new payment will be $1,000 more than your rent, start saving that $1,000 every month now. You build cash for the down payment and closing costs, and the payment will not shock you when it arrives.

If you are a homeowner stuck in the lock-in effect with a 3% or 4% mortgage, I understand why you want to keep it. But if you want to buy the next house, you probably will not see those rates again, so build a plan. And if you carry credit card debt, you cannot deposit a 3% interest rate. A lot of our clients who rolled that debt into a cash-out refinance were saving $1,000 to $2,000 per month, especially if they were not staying in the house for more than another five years.

I am a real estate investor too, and I said that many investors have pretty much put their pencils down. There are still deals in multi-unit properties in certain states, and short-term rentals can work in the right location, but it is not as easy as it was. I also mentioned bonus depreciation, which was reintroduced in January 2025 and gets a lot of attention on social media. Talk to your CPA about it.

This is not a market where the deals jump off the Zillow page. You have to talk to professionals. If you want to build your plan, start with first-time buyer options or get your rate. MortgageOne is now licensed in 49 states.