The 2026 Housing Market Outlook: Stability, Growth, and a New Normal

As the calendar turns to a new year, a clear picture is emerging for the 2026 housing market: modest price growth, easing mortgage interest rates, and a gradual rebound in home sales are expected to reshape the market for buyers and sellers.

2026 Housing Market Outlook

After several years on a roller coaster, the housing market is expected to stabilize in 2026 creating a new set of baselines. Zillow is predicting home values will rise a modest 1.2% nationwide, with existinghome sales increasing to 4.26 million, a 4.3% jump from 2025. Realtor.com forecasts a similar trend, expecting home prices to rise 2.2% and mortgage rates to average around 6.3%, offering buyers slightly more breathing room.

The interesting trend is that the national averages hide some significant regional differences. Experts describe a “twospeed market,” with the Northeast and Midwest experiencing tight inventory and steady price growth, while parts of the South and West may see cooling or slight declines. Rising insurance costs in coastal areas could further widen this divide.

In Northern Michigan, we are seeing new construction ramping up in Grand Traverse and Leelanau counties, however, there is still a large gap between inventory and the demand of the market. Steady price growth and tight inventory are predicted to continue into the near future.

What Buyers Should Expect

Buyers entering the 2026 market may finally feel a shift. With inventory nationwide projected to rise nearly 9% yearoveryear, competition should ease compared to the frenzied pandemicera market. Mortgage rates in the low6% range won’t feel “cheap,” but they will feel far more manageable than the peaks of 2023–2024.

Still, affordability challenges remain—especially for first time buyers. The National Association of Realtors (NAR) notes that cash buyers and equity-rich homeowners will continue to dominate, making it harder for new entrants to compete.

Key Market Drivers for Buyers

• Improved affordability as mortgage rates are trending down and job growth remains strong

• Gradual inventory recovery with an increased focus on new construction

What Sellers Should Know

Sellers will benefit from price stability, steady demand, and less dramatic market swings.

However, sellers shouldn’t expect the bidding wars of 2021. Buyers are more price-sensitive, and homes will need to be competitively priced and well-presented to stand out.

Broader Economic Forecast

The broader economy is expected to support the housing rebound. Job growth remains a key factor, and easing inflation should help stabilize mortgage rates. Realtor.com notes that while the recovery will be slow and fragile, the market is moving toward a healthier equilibrium.

NAR’s forecast is even stronger, predicting a 14% nationwide increase in home sales, signaling renewed consumer confidence and pentup demand finally being released.

Final Thoughts

The 2026 housing market won’t be a return to the explosive growth of the early 2020s—but it will be a year of renewed momentum, greater balance, and improving affordability.  Tight inventories, higher mortgage interest rates and affordability remain the key constraints on buyers, however, there are positive signs on the horizon for the housing market.