Home Prices to Rise 1.2% in 2026, Realtor.com Forecasts

Home prices are now projected to increase by 1.2% through the end of 2026, a downward revision from Realtor.com's earlier forecast of 2.2% growth. This updated prediction comes from the Realtor.com economic research team's midyear update released on Wednesday, offering potential relief to prospective homebuyers struggling with affordability. For context, national home prices saw a 2% increase in 2025. The revised forecast attributes the slower price growth to observed trends of softer sales and asking prices throughout the current year. Although inventory growth has moderated, the ongoing increase in the number of homes available for sale is contributing to a dampening effect on price momentum, according to Realtor.com Chief Economist Danielle Hale.

This projected slower price appreciation, which trails the anticipated 3.4% inflation rate for the year, is expected to provide a modest real-dollar advantage to buyers. Hale noted that this adjustment is "much needed" and begins to improve affordability, especially when combined with lower mortgage rates compared to the previous year and rising incomes. The forecast anticipates that mortgage rates will average 6.3% for the remainder of 2026, consistent with the initial December forecast. While this rate is a slight improvement from the 2025 full-year average of 6.6%, it remains significantly higher than the 2013–2019 average of 4%.

Forecasters expect the median U.S. household income to grow by 3.9% in 2026, surpassing the initial prediction of 3.6%, supported by stable hiring and unemployment figures. These economic factors, coupled with the moderated home price growth, are anticipated to substantially enhance affordability for home shoppers during the fall and winter months. Consequently, the typical monthly mortgage payment for a median-priced home is projected to decrease by 1.9% compared to the previous year. Hale described these developments as a positive shift for buyers facing persistent affordability challenges.