The housing market has spent the past few years stuck with high prices and slow sales. But in 2026, conditions are expected to ease slightly for buyers, a shift Redfin describes as a “reset” year.
That reset is being driven by a growing supply of homes after years of limited inventory, which may push prices down in some markets next year.
Overall, home prices have mostly leveled off over the past two years, as new construction has picked up. And there are already signs the market is loosening: Homes are sitting on the market longer, negotiations are becoming more common, and builders are offering discounts in markets where the supply of newly constructed homes has increased, according to Realtor.com.
That doesn’t mean homes will suddenly become affordable nationwide. Median home prices are still too high for many buyers after rising by 25% since 2020, according to U.S. Census data. Thirty-year fixed mortgage rates are also expected to remain elevated above 6% in 2026, limiting how much relief buyers are likely to see.
In some markets, though, builders are increasingly using price cuts and incentives to move inventory, giving buyers more leverage, even though affordability remains tight overall.
“The bottom line for 2026 is that it will be a transitional year,” Chris Reis, a broker with Compass in Seattle, tells CNBC Make It. “There won’t be a crash or a boom, just the market finding its footing after years of extraordinary disruption. Buyers will have more selection and negotiating power than at any time since the pandemic.”
What to expect in 2026
Most housing forecasts point to a market that looks more stable than dramatic: Home prices are expected to rise slowly, and mortgage rates might dip modestly, although borrowing costs will still make buying expensive for many households.
Here’s how several major forecasters expect U.S. home prices to change in 2026:
Meanwhile, 30-year fixed mortgage rates are expected to stay above 6% in 2026, where they’ve been for the past three years. The current average rate is about 6.2%, according to Mortgage News Daily. Here’s where major forecasters expect rates to land next year:
While there may not be a lot of cost relief in home prices or mortgage rates, buyers are seeing more negotiating room where housing supply has increased — particularly in new construction.
That’s because builders sitting on recently completed homes are more willing to make deals, says Joel Berner, senior economist at Realtor.com.
“Quick move-in inventory is readily available, and builders are cutting prices and offering incentives to get it sold,” he wrote in a recent blog post. That flexibility is less common in the current housing market, where many homeowners remain locked into lower mortgage rates and have little incentive to sell.
Where prices could decline in 2026
Home-price trends in 2026 are expected to vary widely by metropolitan area.
While prices will keep rising modestly in many parts of the country, some large housing markets are expected to see flat or declining prices, particularly across parts of the West and South, per Realtor.com. In those areas, buyers may find more room to negotiate.
Based on Realtor.com’s 2026 forecast, these are 10 of the 100 largest U.S. metros expected to see the biggest year-over-year home-price declines next year:
- Cape Coral–Fort Myers, Florida: −10.2%
- North Port–Sarasota–Bradenton, Florida: −8.9%
- Stockton–Lodi, California: −4.1%
- Raleigh, North Carolina: −3.7%
- Deltona–Daytona Beach–Ormond Beach, Florida: −3.6%
- Tampa–St. Petersburg–Clearwater, Florida: −3.6%
- Spokane–Spokane Valley, Washington: −3.5%
- Denver–Aurora–Lakewood, Colorado: −3.4%
- Sacramento–Roseville–Arden-Arcade, California: −3.3%
- San Francisco–Oakland–Hayward, California: −2.5%
Realtor.com’s projections estimate 2026 home-price changes by factoring in inventory, mortgage-rate expectations, and local economic conditions.
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