As we approach 2026, signs of a meaningful shift in the housing market are becoming more apparent. After years of volatility, rising mortgage rates, and low inventory, the tides are beginning to turn. At Best Option Mortgage, we’re closely tracking the latest data and buyer behaviors to bring you a clear, confident housing market forecast for 2026—and what it means for your next move.
Whether you're looking to buy, sell, or simply stay informed, here's what you need to know about where the market is heading—and how to prepare.
The Market Is Gaining Balance
Over the past year, we’ve observed gradual improvements in the housing market’s core fundamentals. While 2021 and 2022 brought intense competition and skyrocketing prices, 2025 has been a year of recalibration—and 2026 is poised to continue that trend.
Mortgage rates, one of the biggest market influencers, have begun to ease from their recent peaks. Even small declines in rates can significantly increase affordability for homebuyers, restoring confidence and purchasing power. We’re already seeing that impact reflected in increased buyer activity and more mortgage applications.
According to data shared here, mortgage rates are expected to gradually decline into 2026, potentially landing in the low 6% or even high 5% range. While nothing is guaranteed, this shift is encouraging buyers to re-enter the market—and motivating sellers to list.
Inventory Is Opening Up
One of the biggest obstacles in recent years has been limited housing inventory. Many would-be sellers chose to stay put, unwilling to give up ultra-low mortgage rates secured in 2020 and 2021. But that’s beginning to change.
We’re now seeing more homeowners list their properties, bringing new supply to the market. This increase in listings creates much-needed balance. While inventory isn’t exploding, it’s growing at a healthy pace, offering more choices to buyers and reducing the pressure that once led to bidding wars.
This trend aligns with insights we explored in our 2026 Housing Market Outlook, where we broke down the connection between rising inventory and improving buyer-seller dynamics.
Buyer Activity Is Rebounding
The market slowdown of the past year wasn’t due to a lack of interest. It was a result of affordability constraints. Now that rates are improving and inventory is rising, buyers are returning—especially those who had paused their search in 2024 or early 2025.
At Best Option Mortgage, we’ve seen a significant uptick in pre-approvals and home financing inquiries, particularly from first-time buyers. Many are realizing that today’s market offers a rare window of opportunity: more negotiating power, fewer bidding wars, and stable price growth.
If you’ve been waiting on the sidelines, this could be the moment to act. Our blog post on homebuyer search trends offers further insights into how this buyer re-engagement is playing out.
Price Growth Is Leveling Out
In 2026, home prices are expected to continue climbing—but at a much more moderate pace. Gone are the days of double-digit annual increases. Instead, we’re heading toward sustainable, steady appreciation, which benefits both buyers and sellers.
A stable pricing environment builds confidence. Buyers feel less urgency and can make thoughtful decisions. Sellers, on the other hand, can still achieve strong returns—especially when their homes are priced right and well-presented.
If you’re a seller preparing for next year’s market, check out our guide on navigating a shifting market to understand how to position your property competitively in 2026.
What This Means for Buyers
The forecast for 2026 offers a more welcoming landscape for buyers—especially those who felt priced out during previous surges.
Here’s what you can expect:
Lower mortgage rates will increase affordability
More listings mean greater choice and less pressure
Less aggressive competition provides room to negotiate
Stabilized pricing allows for smarter financial planning
Now is the time to get prepared. Start by getting pre-approved so you’re ready to act quickly when the right property comes along. We recommend reading our post on how to get ready to buy in a changing market to help you map out your next steps.
What This Means for Sellers
Sellers should be encouraged by the 2026 forecast—but also strategic. With more homes coming onto the market, buyers will have options. That means pricing, timing, and presentation will be more important than ever.
The good news? Buyers are coming back, and they’re serious. The key is to make your property stand out with proper preparation, competitive pricing, and the right marketing strategy. Partnering with experienced professionals (including your lender) can make all the difference.
For more selling strategies in a balanced market, explore our blog on housing market forecasts for the second half of the year.
The Bottom Line
The housing market is turning a corner. As we move into 2026, conditions are improving across the board—more favorable rates, rising inventory, increased buyer activity, and moderated home price growth.
It’s not a dramatic swing. Rather, it’s a steady path toward a more balanced, healthier housing market—and that’s good news whether you’re buying, selling, or just planning ahead.
At Best Option Mortgage, we’re here to guide you through every step of the journey. Our loan specialists understand these shifts and can help you navigate them with confidence.
FAQ: Housing Market Forecast for 2026
What’s the housing market forecast for 2026?
The 2026 housing market is expected to show improved affordability due to lower mortgage rates, increased home listings, and steady—rather than rapid—price growth. This creates a more balanced environment for buyers and sellers alike.
Will mortgage rates go down in 2026?
While exact predictions vary, the consensus points to a gradual decline in mortgage rates. Rates may fall into the low 6% or high 5% range, depending on economic trends and Federal Reserve policy. More details here.
Are home prices expected to drop in 2026?
No. Prices are projected to continue rising but at a more sustainable rate. Instead of large spikes, expect moderate, steady appreciation—good for market stability.
Is 2026 a good year to buy a home?
Yes. Buyers will benefit from a combination of improving rates, more inventory, and less competitive bidding. Now is the time to prepare financially and get pre-approved.
How should I prepare to sell my home in 2026?
Start by reviewing your local market, getting a home valuation, and working with professionals to price and market your home effectively. Our blog on selling in a shifting market is a great place to begin.
What factors will influence the housing market forecast for 2026?
Key drivers include mortgage rate trends, national and local inventory levels, buyer sentiment, and broader economic health. Local market conditions will also play a critical role in pricing and demand.
Ready to Make Your Move?
Whether you're buying your first home, upgrading, or considering selling, the 2026 market could be your best opportunity in years. Our team at Best Option Mortgage is here to help you plan, finance, and close with confidence.
Get started today—reach out for a free consultation or begin your mortgage pre-approval online.
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Best Option Mortgage is a DBA of ML Mortgage Corp. ML Mortgage Corp. is a state-licensed mortgage lender, NMLS ID #362312, licensed by the CA Department of Financial Protection and Innovation under the Finance Lenders Law, License #60DBO69831. For other states, visit www.mlmortgage.net. To verify licenses, visit www.nmlsconsumeraccess.org. All loans are subject to credit approval and acceptable collateral. Additional terms and conditions apply. Programs, rates, terms, and conditions may change without notice. Not all programs are available in all states. There is no guarantee that all borrowers will qualify. Restrictions may apply. This is not a commitment to lend. © 2025 ML Mortgage Corp. All rights reserved.