Market Overview - The real estate market is expected to be calmer heading into 2026, but not significantly cheaper or easier for buyers and sellers [1] - Expert predictions indicate that preparation, flexibility, and local conditions will be more important than timing the market [1] Mortgage Rates - As of December 11, 2025, the average 30-year fixed mortgage rate is 6.22%, which is lower than its peak but still high compared to pandemic-era rates [2] - Predictions for 2026 suggest mortgage rates may decrease, with estimates ranging from the low- to mid-6% range, and Fannie Mae forecasting a rate of 5.9% by the end of the year [3][4] - Small rate drops may not significantly alleviate the burden of high home prices, property taxes, and insurance costs [5] Home Prices - Home prices are expected to experience modest growth, with national values projected to rise about 1.2% in 2026 according to Zillow, and Redfin predicting roughly 1% growth [7] - The resilience of home prices is attributed to ongoing supply shortages, with inventory not returning to pre-pandemic levels [8] - A nationwide collapse in home prices is unlikely, as many markets still face tight supply [9] Rental Market Dynamics - The rental market provided some relief in 2025, with new apartment supply leading to higher vacancies and softer rents [11][12] - Developers are expected to slow construction in 2026, which may lead to firmer rents in areas with lagging supply [13] - Renting is increasingly viewed as a viable strategy for many households due to high home prices [14] Buyer and Seller Dynamics - The housing market appears more favorable to buyers on paper, with homes spending longer on the market, but local inventory levels still dictate seller advantages in many areas [16][17] - The experience of buyers can vary significantly based on local market conditions, with some able to negotiate better terms while others face competition from cash offers [19][20] Preparation for Buyers - Renters aiming to buy in 2026 should focus on reducing monthly obligations and improving credit scores, as lenders are closely monitoring these factors [21][22] - Buyers are encouraged to build savings and consider cash reserves to ensure they can comfortably manage future mortgage payments [25][26] Homeowner Considerations - Homeowners are sitting on significant equity and low mortgage rates, which complicates decisions about moving or refinancing [30][31] - Inventory levels are rising but still fall short of pre-pandemic numbers, making personal financial calculations more relevant than national trends [32][35] - Homeowners should focus on aligning their buying plans with their financial situations and long-term goals [35][36]