As of late January 2026, real estate economists are noting early signs of a gradual rebalance in the U.S. housing market, with modest improvements expected for both buyers and sellers. Industry forecasts suggest that existing-home sales may experience slight growth in 2026 after years of constrained activity, thanks in part to stabilizing mortgage rates and improving market conditions.
According to projections from Realtor.com, mortgage rates, although still elevated compared to recent decades, have stabilized near multi-year lows. Analysts expect the average mortgage rate to hover around 6.3 percent in 2026, which could provide some relief to prospective homebuyers facing affordability pressures. This marks a slight improvement compared to 2025, when higher rates had led to a slowdown in housing activity.
Despite these positive signs, home prices are still anticipated to rise modestly in 2026, though not at the rapid pace seen in previous years. The supply of homes for sale is also expected to continue improving, which may help create a more balanced market—one that benefits both buyers and sellers. The combination of improved inventory and a more stable price environment could contribute to increased market activity and offer opportunities for those who have been sidelined in recent years due to high prices and limited availability.
However, despite these encouraging trends, mortgage applications have been somewhat dampened by the recent rate increases, indicating that housing recovery remains a slow and ongoing process. For many potential buyers, especially first-time homebuyers, affordability continues to be a challenge, despite the stabilization in rates.
In the broader context, the real estate market is slowly recovering from the disruptions caused by the rapid rate hikes of previous years. While the process is expected to be gradual, the latest forecasts suggest that 2026 could be a turning point toward a more balanced and sustainable housing market, making it easier for buyers to enter the market while providing sellers with more opportunities to find buyers.
As the year progresses, economists and real estate professionals will continue to monitor these trends closely, with hopes that a further stabilization of mortgage rates and an increase in inventory will contribute to a healthier and more accessible housing market for all.
