Navigating the U.S. housing market: Forecast for 2026

The U.S. Housing Market: A Look Ahead to 2026

Following a period of historic lows in 2025, where only 28 out of every 1,000 homes changed hands, the U.S. housing market is poised for a significant rebound in 2026.

Despite this optimistic outlook, the recovery is expected to vary across different regions, with nearly a quarter of major metros predicted to experience price declines while national sales are projected to increase by 14%.

The current turnover rate of 2.8% marks a 38% decrease from the peak during the 2021 pandemic and a 31% drop from pre-pandemic levels in 2019.

Several factors are contributing to this slowdown, including an affordability crisis due to high home prices and increased borrowing costs, a rate-lock effect that has kept over 70% of mortgaged homeowners in loans below 5%, and widespread economic uncertainty regarding job security and inflation.

Chen Zhao, Redfin’s head of economics research, stated, “America’s housing market is currently characterized by caution. Buyers are increasingly backing out of deals, whether due to affordability concerns or a reevaluation of the timing for their purchase.”

According to Zhao, when both buyers and sellers hesitate, home sales naturally decline to historic lows, with little immediate improvement in sight for the frozen market conditions.

National Association of Realtors’ Top Markets for 2026

The National Association of Realtors has identified Charleston, Charlotte, Columbus, Indianapolis, Jacksonville, Minneapolis–St. Paul, Raleigh, Richmond, Salt Lake City, and Spokane as the top housing markets for 2026. Notably, no Colorado cities made the list.

Chief Economist Lawrence Yun selected these markets based on economic strength, demographic trends, and housing availability during NAR’s Real Estate Forecast Summit.

Yun predicted that lower mortgage rates and increased inventory will attract buyers back to the market in 2026, with existing-home sales expected to rise by 14%, home prices to increase by approximately 4%, and mortgage rates to decline towards 6%.

Price Projections for 2026

While national home prices are forecasted to rise by 2.2% in 2026, certain markets like Florida, California, and Denver are anticipated to see declines. Denver, in particular, may experience a 3% drop due to ongoing multifamily construction and migration trends.