Advisors debate whether 2026 will be a good year to buy a 'forever home'

Home is not only where the heart is, it’s also the single largest investment most people will ever make.

So given the current economic conditions, what are advisors telling their clients about the housing market heading into 2026?

US home prices saw a marginal annual increase of 0.1% year-over-year between October and November 2025, a slowdown from the previous year's rate, according to Zillow. Meanwhile, mortgage rates have moved sideways since Federal Reserve interest rate cuts in September and October.

John Benton, financial planner at Prudential Advisors and founder of Chartered Financial Services, for one, believes 2026 may be a good time to buy. In his view, mortgage rates have eased this year and may come down even more in 2026.

“Understanding your budget is the main strategy – especially for first-time buyers – when our clients are concerned about affordability. Doing a deep dive into spending and saving strategies to see how a new mortgage would fit into that equation is a necessary step,” Benton said.

There are general rules of thumb that can be factored in as well, according to Benton. The 28/36 rule, for example, says 28% of gross income should be the maximum spent on housing - principal, interest, taxes and insurance - and 36% of gross income on all debt.

“When we understand your budget, we can see if a new home would be affordable. We also recommend beefing up an emergency fund before a new purchase as there are always unexpected expenses when buying a home,” Benton added.

When it comes to purchasing a primary home, Matt Reynolds, founder of Genesis Wealth, says timing the market is far less important than working toward homeownership itself. He adds that in many housing markets, paying down one’s mortgage, rather than paying a landlord’s, has historically been the stronger long-term financial decision.

“Rates are certainly higher than the historic lows we saw after COVID and during the decade following the Great Financial Crisis. But even if today’s rates feel high, you can always refinance later if rates fall and your home maintains its value,” Reynolds said.

He also encourages clients to get creative when negotiating.

“Ask sellers for concessions such as rate buy-downs, which can meaningfully reduce your monthly payment. Also, avoid expecting perfection in the home you buy; once you own it, you can improve it over time,” Reynolds said.

Elsewhere, Joshua Schwartz, CEO of Retirement Plan Advisors, which is affiliated with Cambridge, said people often get stuck answering “what’s a good investment” rather than focusing on “what’s a good investment for my family at this time in our lives.” He notes that this is particularly true for a primary home purchase, and especially for a first-time home buyer.

Emphasized Schwartz: “A home is more than a simple investment. It's something you use every day. Don’t get too hung up on the current rates to prices. That said, once a buyer starts considering real estate that is not a primary or secondary residence, there are other considerations, as this kind of property serves as a pure investment with no personal utility component.”

An investment or a "forever home"?

Real estate can be a fantastic investment, as long as the rest of one’s financial house is in order. But it is typically not a highly liquid asset. That’s why when clients are balancing real estate as an investment versus “forever home,” Benton discusses all of their goals and objectives and explores how the property fits into that equation.

“Things aren’t always black and white. Clients have desires that can stray away from what makes financial sense. Our goal is to help our clients balance those two things,” Benton said.  

Genesis Wealth’s Reynolds, meanwhile, believes the decision largely depends on how long the client plans to live in the home. If the intention is to treat it as an investment and sell within seven years, he focuses on features that support strong resale or rental potential.  

“You should prioritize layouts that appeal to a broad audience, desirable school districts, and strategic upgrades that future buyers or renters will value. However, if the home is truly a forever home, your comfort and happiness become the priority. You no longer need to think about what the masses want, instead, focus on what works best for you and your family,” Reynolds said.

When building financial plans with clients, he encourages them to think of their primary residence as an asset that provides shelter, stability, and quality of life not necessarily as an investment vehicle.

“I rarely assign it an aggressive growth rate in planning projections. That doesn’t mean your home won’t appreciate; some markets have seen tremendous gains, but that appreciation shouldn’t be assumed or relied upon,” Reynolds said.