What will happen to home prices in 2026? Here's what experts say buyers should know now.

Homebuyers finally got some good news late this year when mortgage rates dropped considerably following the Federal Reserve's back-to-back rate cuts in September and October. With the Fed easing its stance on rates, the average 30-year fixed mortgage rate fell into the low-6% range — a notable improvement from the 7%-plus rates homebuyers faced earlier this year.

These lower borrowing costs are helping to reignite interest in the housing market, but the big question now is what happens next. Will improved affordability bring more buyers into the market and push home values higher? Could rising inventory finally give buyers the upper hand? Or will economic uncertainty keep things flat?

As 2026 approaches, the direction of home prices is up in the air, so we spoke with mortgage and real-estate professionals to get their predictions about where prices could head next year. Here’s what they had to say.

Where home prices could head in 2026

Steven Glick, director of mortgage sales at Ziffy, an all-in-one AI-powered real-estate investment platform, expects flat to mildly positive home appreciation — somewhere between 0.5% and 2%.

“That band reflects two things moving in opposite directions: rates have eased enough to coax demand back, but affordability is still stretched and supply is slowly rebuilding,” Glick says.

This outlook signals a return to normalcy after years of extremes, according to Debbie Calixto, sales manager at mortgage lender loanDepot. “We expect moderate price growth in 2026 — likely below 4% on average across the country,” Calixto says.

Karen Mayfield, national head of originations at mortgage-as-a-benefit provider Multiply Mortgage, sees a similar pattern unfolding as lower rates bring buyers and sellers back into the market. Mayfield predicts pent-up demand will absorb the new home supply that comes online.

What could push prices up in 2026

Several conditions could push home prices higher in 2026, experts say.

Mortgage rates drift below 6% and stay there

“Each quarter-point matters for monthly payments and buyer qualifying power,” says Glick. “With the Fed already easing and signaling more to come, a gentle slide in mortgage rates would firm demand.”

The labor market holds steady

“If employment is stable, more people will come off the fence and buy,” says Joe Chung, a realtor with Coldwell Banker. When demand improves, prices tend to climb.

Construction costs rise

“Tariff-driven cost increases will push new home prices higher, creating a floor for existing home values,” Mayfield says.

What could push prices down in 2026

On the flip side, experts say a few factors could push home prices down next year.

Mortgage rates climb back up

“An inflation surprise or wider risk premiums would lift the 10-year Treasury and, by extension, 30-year mortgages,” Glick says. As affordability worsens, fewer buyers can qualify, weakening demand and putting downward pressure on prices.

Housing supply surges unexpectedly

According to Mayfield, a wave of baby boomers downsizing — meaning more home sellers — could flood the market with inventory faster than buyers can absorb it.

The economy weakens

Rising unemployment or a broader economic downturn would reduce buyer demand and purchasing power.

What this means for buyers right now

For buyers in 2026, the takeaway from every expert we spoke to is the same: the rate environment has improved, but you still have to underwrite each property on its own merits. Lock pricing when the math works, don’t time the macro, and pay attention to local supply — the national average will hide markets that are heating up and markets that are softening.

For sellers, this is the first window in three years where listing strategy actually matters again. Pricing realistically into a market with returning — but still rate-sensitive — buyers is going to separate the listings that move from the listings that sit.

— Reporting compiled by the StyleClickTV editorial desk. Sources: Steven Glick (Ziffy), Debbie Calixto (loanDepot), Karen Mayfield (Multiply Mortgage), Joe Chung (Coldwell Banker).