Realtor.com forecasts home price gains to cool as buyers gain ground in the second half of 2026

Residence affordability is expected to improve as housing price growth slows to a lower pace than inflation, the new report states.

Realtor.com issued an update to mid-2026 on Wednesday housing market forecast which estimates home price growth will slow to 1.2 percent this year, slower than the original forecast for this year and slower than the rate of inflation. This means that house prices will actually decrease when adjusted for inflation.

« Against both familiar and new challenges, the economy has proven to be resilient. As a result, the first half of 2026 brought stability to the housing market more than momentum, » said Realtor.com Senior Economist Danielle Hale.

« The housing market is moving forward as sellers reset expectations, price growth cools and buyers gain more bargaining power, » Hale said. « Looking ahead, we expect momentum to pick up in the second half of the year as more buyers and sellers on the sidelines find terms that work for both parties. »

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Mortgage interest rates They are forecast to remain steady at 6.3%, the same level they were at the end of 2025, as a rebound in inflation caused by the Iran war dampened the prospect of rate cuts in the first year of the year, which could have helped lower mortgage rates.

The slower growth rate of house prices is expected to help lower the price monthly mortgage payments year-on-year, which is forecast to decline 1.9% this year – up from the original forecast of a 1.3% decline.

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In contrast, the average monthly mortgage payment rose 1.9% in 2025 and rose an average of 7% from 2013 to 2019.

Current housing sale A modest improvement is expected from a year ago, rising from an estimated 4.06 million in 2025 to 4.1 million this year – although growth is forecast to be less than the original forecast of 4.13 million dwellings in 2026.

« Buyers and sellers have shown a lot of persistence this year, » Hale said. « This is a market where people adapt and show up instead of giving in. Sellers are facing more realistic asking prices in the market, which helps close deals. »

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The inventory of existing homes for sale is also expected to grow more slowly than previously estimated, increasing by 3.6% per year instead of the 8.9% growth forecast in 2010. Realtor.compreliminary forecast for this year.

Sales of new apartments have weakened as mortgage rate purchases and price cuts that encouraged buyers to approach builders have lost their appeal amid stabilizing prices.

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Builders have pulled permits and new home starts are steepest in the South and West, which had driven much of the national construction and have more fully recovered from the supply shortage.

In the entire country, the housing construction deficit is still estimated to be 4 million apartments, and the biggest opportunity is in the Northeast and Midwest, which face the most significant shortage.