Date Published: December 2025
A year ago, economists were fairly accurate in their predictions for 2025: 30-year mortgage rates remained above 6%, as expected, and home-price growth continued to slow. Forecasts for home-sale growth, however, were mixed—many experts were simply too optimistic.
Depending on how the final weeks of December unfold, 2025 is on track to end either flat or slightly above 2024 in total home sales.
Looking ahead to 2026, the first wave of forecasts from real estate economists point to gradual improvement for both buyers and sellers, despite lingering economic uncertainty.
“While lower mortgage rates and more inventory will bring some buyers back, this will be a reset year, not a rebound year,” said Lisa Sturtevant, chief economist at Bright MLS. “Market performance will hinge on local economic conditions, making 2026 one of the most geographically divided markets we’ve seen in years.”
Affordability is also expected to improve. For the first time since the aftermath of the financial crisis, home prices are projected to grow more slowly than wages. Combined with slightly lower mortgage rates, this means monthly housing payments should rise at a slower pace than income.
AI will also play a growing role in homebuying. Economists expect it to become a “matchmaker” for buyers, helping them identify properties that fit their budget and preferences with far more precision.
“Instead of a typical geographic search, homebuyers will search for exactly what they want and engage in a back-and-forth conversation with search platforms, providing feedback to tailor their results,” they wrote.
Are the Experts Right?
What do you think 2026 holds for the mortgage and housing markets? How are you planning for it? Leave your thoughts in the comments.
Resources:
Economists expect “a Reset for Housing in 2026’” ‘Not a Rebound., https://www.realestatenews.com/
The Outlook for Mortgage Rates, Home Prices in 2026, According to Redfin, https://www.businessinsider.com/
Author: Bretta Watkins
