2026 Real Estate Market Outlook: What Buyers, Sellers & Investors Need to Know

As we enter 2026, the U.S. housing market is shifting into a new era of balance — moving away from the extremes seen during the pandemic and easing some of the affordability pressures that slowed transactions over the last several years. According to the latest Compass Housing Market Outlook and other industry forecasts, next year may offer more opportunities and less volatility for buyers, sellers, and investors alike.

📊 The Big Picture: A More Balanced Market

Compass projects that 2026 will mark a meaningful transition from the challenging conditions of recent years toward a more normalized housing market:

• Flat to modest home price growth: National home prices are expected to rise only about 0.5%, far below the double-digit gains seen earlier in the decade.

• Sales on the rise: Existing home sales could increase by 4–5%, signaling renewed buyer activity.

• More homes for sale: Inventory levels may grow around 5–10%, giving buyers better options.

• Mortgage rates stabilizing: Rates are forecast to average roughly 6.4%, potentially boosting affordability compared to recent peaks.

This combination indicates a housing market that is balanced, with moderate growth and less dramatic swings than we’ve seen previously. 

🏡 What This Balance Means for Affordability

A key theme of the 2026 outlook is improving affordability — not from big price drops, but from income growth outpacing home price gains. As wages rise faster than prices:

• Monthly mortgage payment burdens may soften

• Buyers who paused due to tough affordability could re-enter the market

• Competition may be less intense in many markets

Compass economists describe this shift as the market thawing from a period of frozen mobility, where homeowners stayed put because higher rates and limited inventory made moving less appealing.

🏠 Homes Selling & Mobility Returning

For much of the early 2020s, “The Great Stay” — a term Compass uses to describe a prolonged slowdown in household moves — limited market activity. By 2026:

• More homeowners are expected to list, releasing pent-up supply

• Mobility could increase as people act on relocation, upsizing, downsizing, or lifestyle changes

• Buyer interest already shows signs of strength, hinting at a wider rollout of activity in the year ahead

This regeneration of market movement is a key reason Compass anticipates sales growth in 2026. 

📍 Regional & Segment Differences Still Matter

While national averages point to balance, local markets won’t all look the same. Compass highlights that:

• Some regions — especially where supply remains tight — may still face competitive conditions

• Other areas, especially those with rising inventory, may experience slower price growth or even slight declines

• Luxury home segments (properties over $1 million) are expected to continue strong performance, driven by higher-income buyers less sensitive to interest rates and price pressures

This geographic and segment variation means hyper-local expertise will be more valuable than ever in 2026.

📈 Key 2026 Market Trends at a Glance

🧠 What Buyers Should Know in 2026

Buyers stand to benefit as the market becomes more balanced:

✔️ More choices with growing inventory
✔️ Less intense competition in many markets
✔️ Slight easing of payment burdens as incomes rise

Tips for Buyers:

• Get pre-approved early to strengthen offers

• Focus on markets with improving supply and job growth

• Work with agents who understand evolving micro-market conditions

💼 What Sellers Should Consider

For sellers, 2026 won’t be as frantic as 2021–2022, but it still offers real opportunities:

✔️ More buyers returning to the market
✔️ Increased negotiating dynamics — you still can command value with right positioning
✔️ Luxury and high-demand areas remain strong

Tips for Sellers:

• Price strategically based on current local conditions

• Market unique home features that justify value

• Use expert agents to highlight your home in a balanced market

🔍 Final Takeaways: 2026 Is About Balance & Opportunity

The 2026 housing market is shaping up to be calmer, more predictable, and more navigable than the recent past. With modest price growth, rising inventories, and improving affordability, both buyers and sellers can find openings — provided they understand their local dynamics and broader trends.

Ready to make your next move in the 2026 housing market? Reach out to Morrell Property Collective to set up a phone call, or consultation to discuss your real estate goals.

https://morrellpropertycollective.com/contact