Is the tide about to turn for homebuyers?
Average 30-year mortgage rates are expected to hover near 6.3% in 2026, marking a shift from the rate shocks that defined much of the past two years and setting the tone for a slower, more balanced housing market.
Realtor.com’s 2026 Housing Forecast projected that after "higher than expected interest rates in most of 2025, mortgage rates finally relaxed in the second half of the year."
The forecast added: "We expect mortgage rates to remain roughly in this range throughout 2026 as slowing economic growth and the end of the Fed's quantitative tightening offset rising U.S. government debt and inflationary pressure that's expected to be temporary."
Affordability inches forward, not surges
Realtor.com forecasts that the typical mortgage payment share of income would retreat to 29.3% in 2026, slipping below the 30% threshold for the first time since 2022.
"Incomes climbing faster than inflation as mortgage rates steady at a lower level create space for affordability to improve," Danielle Hale, chief economist at Realtor.com, said.
"Declining rental prices will continue to give renters more relief from pandemic highs. It's not a dramatic reset, but it's a meaningful shift that moves the market back toward balance."
Home prices are expected to rise 2.2% in 2026, on top of a 2.0% gain in 2025, while inflation is projected to run higher, leaving real prices slightly lower for a second year and offering "additional breathing room for buyers even if nominal prices continue inching higher."
Lock-in eases, but sales stay subdued
Existing-home sales are projected to increase 1.7% to 4.13 million in 2026, still well below pre-pandemic norms.
Realtor.com noted that "four out of five mortgage-holding homeowners have a rate below 6%, giving many little incentive to move unless life changes - such as a new job, family needs, or downsizing - force their hand."
Mortgage rates hovered between 6% and 7% for most of 2025, with the weekly average reaching 6.38% by late September. Moreover, the "golden handcuffs" on low-rate borrowers had begun to loosen as more owners accepted mid-6% financing.
A cautious path to a more active market
Inventory is projected to rise 8.9% year over year in 2026, extending a three-year recovery and leaving for-sale supply about 12% below pre-2020 norms, with the national market averaging 4.6 months of supply.
The forecast warned that policy missteps, a softer labor market or renewed inflation pressure could still unsettle the outlook.
"For many buyers who have spent years navigating limited options and steep competition, a balanced market with more choices and slightly lower cost burdens can be a game-changer, even if conditions remain far from easy," Hale said.
For mortgage lenders and brokers, a 6.3% rate world, modest price gains and slowly easing payments point less to a surge in volume than to a grind toward normality – one where borrowers still need careful guidance on timing, product mix and risk, even as the market finally moves away from the extremes of the pandemic era.
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