Expert 2026 Housing Market and Mortgage Rate Predictions
Dec 31, 2025
If you’re searching for 2026 housing market predictions, you’re not alone.
Every year, buyers, sellers, and homeowners want to know: Will housing prices drop? Will interest rates fall? Is now a good time to buy a house?
I’ve been a mortgage lender for 19 years, and my team is one of the top purchase teams in the U.S. We work in markets across the country, which gives us a real-time view of what’s actually happening—not just headlines.
And here’s the honest truth:
The housing market heading into 2026 feels like déjà vu.
2024 vs. 2025 Housing Market: Why It Feels the Same
When I compared my mortgage production from 2024 to 2025—loan volume and number of closings—the numbers were almost identical.
That’s rare.
Both years saw:
- Market slowdowns tied to political uncertainty
- Ongoing concerns about housing affordability
- Buyers questioning whether they still qualify for a mortgage
- Very little meaningful change in overall market conditions
Despite constant media noise, the U.S. housing market has been remarkably consistent.
That consistency is shaping what I expect for the 2026 real estate market.
2026 Housing Market Forecast: What I Actually Expect
High-Inventory Housing Markets Will Favor Buyers
If you’re buying a home in a high-inventory market, 2026 should continue to work in your favor.
Buyers in these areas can expect:
- More homes for sale
- Continued price negotiations
- Seller concessions, including closing cost credits
- Builder incentives on new construction
These markets are functioning normally—and that’s good news for buyers.
Low-Inventory Housing Markets Will Remain Frozen
In low-inventory real estate markets, I don’t expect much relief in 2026.
Why?
Homeowners with 2%–3% mortgage rates have no financial reason to sell. That rate lock-in is still one of the biggest factors driving the housing inventory shortage.
Unless one of the following happens, these markets stay tight:
- A significant drop in mortgage interest rates
- A government program allowing homeowners to transfer or keep their low interest rate
Neither is likely in the near term.
Will Mortgage Rates Drop in 2026?
This is one of the most searched questions online—and the answer is complicated.
Why a 50-Year Mortgage Won’t Fix Affordability
The idea of a 50-year mortgage has been floated as a housing affordability solution. Realistically, it won’t happen.
Why?
- It doesn’t reduce monthly payments enough to matter
- Longer loan terms usually come with higher interest rates, not lower ones
- It doesn’t address the root affordability problem
I expect this idea to fade quietly.
Portable and Assumable Mortgages: Low Probability Solutions
Portable mortgages and expanded assumable mortgage programs sound appealing—but the logistics are massive.
Most low-rate mortgages originated between 2020 and early 2022. Changing their terms retroactively would require a large-scale federal housing program.
Possible? Yes.
Likely in 2026? No.
Federal Reserve Policy & Interest Rate Volatility in 2026
The biggest potential disruption to mortgage interest rates in 2026 is the Federal Reserve leadership transition.
A new Fed chair could cause:
- Short-term rate volatility
- Temporary market optimism
- Sudden pullbacks if markets lose confidence
However, the Fed operates as a board. One leadership change won’t instantly reverse monetary policy.
Expect rate volatility, not a dramatic, sustained decline.
Jobs, AI, Inflation, and Their Impact on the Housing Market
Beyond the Fed, jobs and inflation will continue to drive interest rates.
One emerging factor in 2026 is artificial intelligence and employment:
- Entry-level white-collar jobs are increasingly automated
- Fields like finance, marketing, and PR are already feeling it
- Skilled trades are booming, with many tradespeople earning seven figures
This shift will influence labor data, consumer confidence, and ultimately the housing market.
Builders, Incentives, and New Mortgage Loan Products
In markets where builders are overbuilt, buyers can expect continued:
- Price incentives
- Rate buydowns
- Closing cost assistance
From a lending standpoint, 2026 will likely mirror 2025 with growth in non-QM mortgage loans, including:
- Bank statement loans
- Asset depletion mortgages
- Investor loans without income verification
Crypto-backed lending may emerge—but it’s still months away from being meaningful.
Final Thoughts: 2026 Real Estate Market = Groundhog Day
If you’re waiting for a dramatic housing market reset, I don’t see it yet.
The 2026 housing market outlook looks a lot like 2025:
- Opportunity in high-inventory areas
- Stalemates in low-inventory markets
- Continued affordability challenges
- Incremental changes, not breakthroughs
Until something fundamentally shifts—rates, inventory, or policy—we’re living in a real estate version of Groundhog Day.
And sometimes, knowing what won’t change is just as valuable as predicting what will.
Have mortgage questions or want to plan to buy a house? Call me! 786-933-2077
