If Mortgage Rates Drop to 5% in 2026, Average Home Prices Could Jump This Much

The average U.S. home currently costs $360,727 according to Zillow, but that number could climb significantly if mortgage rates drop to 5% in 2026. While most forecasters predict rates ending next year around 5.9% to 6%, even that modest decline could unlock major buyer demand — and push prices higher than current projections suggest. Read Next: 7 Cities With Homes Expected To Plummet in Value in the Second Half of 2025 Check Out: 7 Wealth-Building Shortcuts Proven To Add $1K to Your Wallet This Month Her ...