The US housing market will get a bit more affordable in 2026

by Prashant Gopal and Josyana Joshua

Aspiring homebuyers should find the US housing market slightly more affordable in 2026, even without the benefit of lower mortgage rates. 

Bloomberg asked nine market analysts to predict how the housing market will look next year. They forecast a median price increase of 1.5%, less than this year and — critically — much less than the expected growth in employee wages. The combined effect will make houses cheaper in real terms.

Home sales will also rise next year, experts say, with growth estimates ranging from 1.7% to 14%. That would mark the first increase since 2021, when mortgage rates were at historic lows and the market was in the throes of the pandemic buying frenzy.  

he subsequent years have been dismal, with existing home sales approaching 30-year lows in 2023, 2024 and 2025. Even with a 6.3% increase in 2026, the median of the predictions collected by Bloomberg, sales will still have a long way to go before they reach pre-pandemic levels. 

The housing market “isn’t going to come booming out of the funk it’s in,” said Mark Zandi, chief economist at Moody’s Analytics. “It will be a slow improvement over time. And that’s predicated on the assumption that the job market hangs together.”

Rates fell this year from more than 7% to about 6.2%. That modest drop has made it more palatable for some homeowners to sell, even if it means giving up existing, cheaper mortgages. 

The economy is the wild card, Zandi said. If artificial intelligence sparks more layoffs, which are more likely to hit younger workers, that would undermine the housing recovery, he said.

The Federal Reserve lowered interest rates three times in 2025 to bolster the job market, raising hopes among real estate agents for the key spring selling season in a couple months. 

However, most of the analysts surveyed by Bloomberg think mortgage rates will finish next year roughly at today’s levels. Capital Economics Ltd. was the most pessimistic, saying 30-year loans will hit 6.5% based on its expectation that the Fed will only cut rates once next year.

“You need a much sharper drop in mortgage rates to unlock housing,” said Thomas Ryan, North America economist for the London-based macroeconomic firm. The firm predicts sales will rise 4.6% and prices will increase 2% in 2026.

At the other end of the spectrum, the National Association of Realtors sees rates falling to 6%. It also predicts sales will jump 14% and prices 4%, the biggest increases in the survey. 

The trade group projects 2025 sales to be flat for a second year, and transaction levels next year still below pre-pandemic levels, according to Chief Economist Lawrence Yun.

“In the housing market, the mortgage rate dominates the job market in terms of the overall impact,” Yun said. “If there are job losses, that means the Federal Reserve is probably going to be a little more aggressive in cutting the interest rate.”

© 2025 Bloomberg L.P.