The tide might be turning for homebuyers in 2026. How buyers and sellers can make real estate work in 2026

Core Insights - The housing market is experiencing an increase in inventory, with levels about 20% higher than a year ago, which is expected to lead to more choices for consumers and potentially stabilize or reduce home prices [1][7] - The median home price in the U.S. decreased to $396,800 in January 2026, down $18,400 from October 2025, indicating a cooling in home prices compared to previous years [3][4] - Major real estate organizations predict low home price growth throughout 2026, with the Mortgage Bankers Association projecting a decline in home prices for several quarters due to increased housing supply [3][7] Inventory and Pricing Trends - Realtor.com's forecast anticipates an 8.9% year-over-year increase in existing home inventory for 2026, suggesting a shift towards a more favorable market for buyers [1][7] - The S&P CoreLogic Case-Shiller Index reported a 1.4% year-over-year increase in national home prices, while the NAR noted a 0.9% annual increase in the median sales price of existing homes in January 2026 [5][6] - The combination of rising inventory and declining mortgage rates is expected to create a healthier market for homebuyers in 2026 [9] Seller Considerations - Homeowners looking to sell may face declining home prices, making it crucial to consider market conditions before deciding to sell [2][13] - The current market is leaning towards a buyer's market, suggesting that selling before potential price drops could be advantageous [13][14] - Homeowners are advised to explore options to capitalize on their existing equity, such as renting out spare rooms or seeking better rates on home insurance [11][12] Economic Context - Consumer confidence remains low, with January 2026's rate being 40.1% lower than in January 2021, which may impact housing market dynamics [10] - Goldman Sachs has reduced its 12-month U.S. recession probability to 20%, but inflation remains above the Federal Reserve's target, contributing to economic uncertainty [17][18] - The labor market is highlighted as a significant uncertainty factor in the 2026 economic outlook, influencing homeowners' decisions regarding mortgages and selling [18]