The U.S. housing market is set to become steadier in 2026 with realtor.com predicting interest rate relief and greater negotiating power for buyers.
The real estate site predicts the average mortgage rate will be 6.3%, which is in line with Redfin's predictions and above Fannie Mae’s expectations of 5.9%
Realtor also forecasts that U.S. home prices will rise 2.2% and home affordability will improve as incomes outpace inflation, pushing the typical payment share of income below 30% for the first time since 2022.
In comparison, Redfin expects prices to increase by 1%, Zillow expects a 1.2% rise and Fannie Mae expects a 1.3 % jump
However, inflation is expected to outpace these gains, with consumer prices likely growing more than 3%, meaning real (inflation-adjusted) home prices will decline slightly for a second consecutive year.
Some U.S. cities will also see a higher rise than others, particularly in the Midwest and Northeast, due to lower supply pushing prices up, according to Realtor.
Toledo, Ohio, is predicted to have the highest growth of 13.1%; however, its median home price of US$199,990 remains lower than Ohio’s state-wide median of US$275,00, according to Realtor’s data.
This follows a trend of the majority of the 11 cities with the highest growth rate falling below the national median price of US$415,000. Only three of these cities surpass this.
Cities where construction is heavier could see house prices falling by as much as 10% in 2026.
According to Realtor, the city set to see the biggest decrease is Cape Coral-Fort Myers, Florida, where house prices are expected to drop 10.2%.
This follows housing prices in the U.S. growing by 1.7% in 2025, the slowest rate in 13 years.
Realtor also expects rental prices to soften, especially in the South and West, with a 1% drop nationally.
