2026 Fall Real Estate Outlook

At the start of 2026, economists had an optimistic read on the housing market: more balance, a modest rise in home values for the year (1.2%), a moderation in mortgage rates, and overall improved affordability for buyers. And for the first few months of the year, the housing market largely played out that way, with monthly home sales about 6.1% higher than a year earlier, at the end of March.

Then a run-up in mortgage rates during what’s typically the height of the spring shopping season cooled down sales growth by 0.8% year-over-year in May.

With the busy spring season behind us and the year heading toward the slower winter market, the picture is more stagnant than it looked in January: home values are holding roughly flat, sales growth is leveling off, we have only slightly improved affordability, rates in the mid-6s, and rents are climbing modestly.

The big picture

For home prices

The typical U.S. home was worth about $371,757 in July, up 1.1% from a year ago, and home values have stayed fairly steady throughout the year. For the rest of 2026, Zillow’s forecast calls for a -0.2% by December 2026. What we’re seeing now is a long way from a downturn. Prices aren’t running away from buyers, and they aren’t falling out from under owners either.

For mortgage rates

Interest rates have held in the mid-6% range, aside from a brief dip below 6% in February. Persistent inflation concerns and elevated energy prices have kept borrowing costs high, with a July oil price shock pushing rates above 6.5% — their highest level in a year. Elevated rates are a significant reason the year didn’t recover as strongly as anticipated.

For inventory

There are more homes to choose from now compared to this time last year. About 1.41 million homes were for sale in July, 1.5% above a year earlier, with new listings up 3.1% year over year. That means the U.S. housing market is on a 32-month streak of supply gains.

Having more homes for sale is part of why prices have stabilized, and it’s uneven by region. Inventory jumped sharply.

For rents

Renters have benefited from a surge in new apartments over the past two years, which gave them more options and helped temper rent growth. But that construction wave is starting to fade, which could mean less relief for renters ahead. Landlords are still competing for tenants though: about 39.8% of rental listings offered aconcession in July, up from 36% a year earlier.

What this forecast means for you

If you’re buying

You may have more room to breathe than buyers did a couple of years ago. With prices flat and more homes on the market, there’s less reason to rush and close on a home out of fear that prices will climb if you wait.

Affordability helps too, for now: the monthly payment on a typical U.S. home is about $1,888, assuming 20% down and excluding taxes and insurance; that’s roughly 0.9% lower than a year ago. But that affordability edge may disappear in the coming months as rates tick back up, so it pays to know your budget.

And watch your local market. Where supply is tight, be ready to move decisively; where inventory has grown, patience could pay off.

If you’re selling

Buyers are out there, but they might be choosier and less rushed than in recent years, so pricing right from day one is important. Overpricing is one of the fastest ways for your home to sit unsold, and can lead you to cut your listing price later. Keep in mind that most sellers are buyers too; that means the same steady market that makes selling a little slower also may make your next purchase less stressful.

If you’re renting

If you’re a renter looking to move, renter-friendly concessions like a waived security deposit, a free month of rent, or discounted amenities will likely stick around (depending on where you live), even with the forecasted rise in rents this year. But that negotiation room may not linger long into 2027.

If you already own your home

Don’t read a flat price forecast as bad news. A stable market gives you more breathing room to make decisions on your own timeline instead of reacting to prices moving quickly. And flat prices this year don’t undo what you’ve already built. Most home owners who bought more than a year or two ago have substantial equity — not because of this year’s forecast, but from years of appreciation and paying down their mortgage. If you locked in a low interest rate, you have real flexibility, whether you’re planning a renovation, weighing a move, or simply staying put.

 

What to keep in mind

Where you live matters, because the data isn’t one-size-fits-all. Your local picture may look quite different from the national one.

These forecasts are educated expectations, not promises. The outlook could change if mortgage rates, inflation or the broader economy shift in unexpected ways. The smart move isn’t to try to outguess the market — it’s to focus on factors within your control; know your own numbers, understand your local conditions, and be ready to act when the right opportunity shows up for you.