Experts Predict Where the Housing Market Is Headed in 2026

Core Insights - The real estate market is facing challenges for both buyers and sellers, with national average prices remaining flat in 2025 according to Zillow Research [1] - Buyers are struggling due to high prices and uncertainty around mortgage rates, leading to market stagnation [2] - Experts are beginning to analyze and forecast the housing market for 2026 as the fourth quarter of 2025 progresses [3] Home Prices - Zillow Research anticipates home values to remain unchanged through January 2026, with a peak growth of nearly 1.9% expected in August [4] - Economists from the Mortgage Bankers Association predict several quarters of declining prices, with no national price increases expected until 2028 [4] Mortgage Rates - Fannie Mae projects mortgage rates to decrease to 6.4% by the end of 2025 and further to 5.9% by the end of 2026, although this may be an optimistic estimate [5] - The Mortgage Bankers Association forecasts a slight drop in rates to 6.3% by 2027, with no significant changes expected in 2025 and 2026 [5] Home Sales - Sales are expected to remain stagnant until the end of 2025, but Zillow Research indicates that inventory may surpass sales, providing buyers with more options in 2026 [6] - Fannie Mae has a positive outlook for 2026 home sales, predicting an 8.9% year-over-year increase by the end of the year [6] - The National Association of Realtors forecasts home sales based on mortgage rates dropping to 6%, which would make home buying affordable for an additional 5.5 million households [7] - The Mortgage Bankers Association also anticipates an increase in sales for 2026, projecting 5 million new and existing home sales compared to 4.8 million in 2025 [8]