Housing Market Predictions for 2026: Will Prices Go Up or Down?

Home prices are still going up in 2026, just slowly. The national median existing home price was $417,500 in September, up 1.3% from a year earlier, according to the National Association of Realtors.

Mortgage rates moved the opposite way many buyers hoped. Freddie Mac’s average 30-year fixed rate was 7.18% on Nov. 5, 2026, up from 6.22% a year earlier.

If you’ve been holding out for a price drop, the major forecasts don’t point to one. Both Fannie Mae and the Mortgage Bankers Association (MBA) expect slow price growth and rates above 7% into 2027. That shifts the decision toward the parts you control: your monthly budget and your credit.

Will housing prices go up or down in 2026?

Up, slightly. With two months left in the year, national prices are running about 1% to 3% above 2025, depending on which measure you look at. NAR’s median sale price was up 1.3% in September, and it was the 39th month in a row of year-over-year gains.

That’s a national number, though. Your local market can move differently, so ask a local real estate agent for recent sale prices and how long homes are sitting in the neighborhoods you’re considering.

What major forecasters are predicting

Forecasters expect prices to keep rising slowly, with growth cooling in 2027.

Fannie Mae’s figures come from its October 2026 housing forecast. The MBA’s come from its October 2026 forecast release.

Treat every forecast as an estimate, including these. In November 2025, Fannie Mae expected the 30-year rate to fall to about 5.9% by the end of 2026. Instead, it went the other direction. That’s a good reason to plan around numbers you can see today rather than numbers someone expects next year.

Factors that could push prices up

• Fewer new homes. Fannie Mae expects total housing starts to fall 1.1% in 2026 and 2.9% in 2027. Fewer new homes can keep supply tight, which tends to hold prices up.
• A strong economy. In its October statement, the Federal Reserve said economic activity is expanding at a strong pace and unemployment has changed little. Steady jobs keep buyers in the market.
• Rates easing faster than expected. The MBA expects rates to come down from their recent peaks, though it still sees them above 7% through 2027. If they fall further than forecast, more buyers could return and compete for the same homes.

Factors that could push prices down

• Higher rates mean fewer qualified buyers. Existing-home sales ran at a 3.99 million annual pace in September, down 2.2% from a year earlier. NAR’s chief economist called August and September the two slowest months for sales this year.
• More homes for sale. Inventory reached 1.60 million homes in September, up 4.6% from a year earlier. That’s a 4.8-month supply, meaning it would take about 4.8 months to sell every listed home at the current pace. That’s up from 4.5 months a month earlier. More listings can give you more room to negotiate.
• Slower population growth. The MBA expects slower population growth and lower immigration to slow how fast new households form, which would reduce demand for housing.

Read more >> How Can I Buy a House for the First Time?

‍Prices aren’t moving the same way everywhere. In September, NAR’s median rose 4.7% from a year earlier in the Northeast and slipped 0.3% in the West. Check the numbers for your area before you decide how “the market’s” going.

Will mortgage rates drop in 2026?

Probably not by much before the year ends. Rates have eased for three straight weeks, but Fannie Mae and the MBA both expect the 30-year rate to stay above 7% through 2027.

Current rate trends

Freddie Mac’s 30-year average dipped to 7.18% on Nov. 5, its third weekly decline in a row. Earlier this year, it was below 6%, at 5.98% in late February.

The Federal Reserve raised its benchmark rate in September for the first time since 2023, then held it at 3.75% to 4% at its Oct. 28 meeting. Two Fed officials voted for another increase.

The Fed doesn’t set mortgage rates directly, though. Mortgage rates tend to follow the 10-year Treasury yield, the interest rate on the government’s 10-year bonds, which the MBA expects to average 5.1% in the last quarter of 2026 and stay near 5% through 2027.

One more thing to know about rate headlines: Freddie Mac’s number is a national average. The rate a lender offers you depends on your credit, your down payment, and the type of loan.

What lower or higher rates would mean for buyers

Small rate changes add up over a 30-year loan. Here’s the monthly principal and interest on a $300,000 loan at three rates from the past year:

Example rates only: Your actual payment would also include property taxes, homeowners insurance, and possibly mortgage insurance.

That roughly 1-point rise costs about $191 more a month on the same loan. Put another way, a buyer with a fixed budget can borrow less this year than last.

Some buyers plan to refinance later if rates fall. That can work, but refinancing comes with closing costs, and no one can promise rates will drop enough to make it worth it. Make sure the payment works at today’s rate.

Run the numbers >> Use Kikoff’s mortgage calculator to estimate your monthly payment and plan your homebuying budget.

Is 2026 a good year to buy a house?

A good time to buy is when the payment fits your budget at today’s rate and you plan to stay in the home for a while. The calendar matters less than those two things. This fall, buyers do have more homes to choose from than a year ago, which can mean more room to negotiate on price, repairs, or closing costs.

Signs it might be a good time to buy

• The payment fits your debt load. The Consumer Financial Protection Bureau suggests keeping total debt payments at 36% of your gross income (before taxes) or less, including the mortgage. Some lenders go up to 43% or higher, but approval doesn’t mean the payment is comfortable.
• You’ll still have savings after closing. If the down payment and closing costs would empty your savings, one car repair could put the mortgage at risk.
• You expect to stay put. Buying and selling both come with costs, and slow price growth means less help from rising home values if you have to sell soon.
• Your credit reports are accurate and current. No surprises means fewer delays once you apply.

Signs you might want to wait

• The payment only works if rates drop. If you’d need to refinance to afford the home, the plan depends on something no one controls.
• Your income is uncertain. A new job, variable hours, or a pending layoff can affect approval and your ability to keep up.
• You’ve found errors or recent late payments on your reports. A few months of on-time payments, and fixing any mistakes, can help you qualify for better terms later.
• You’d have to stretch past the guideline. Waiting while you pay down debt and save can put you in a stronger spot, even if prices rise a little.

If you’re unsure where your numbers land, a HUD-approved housing counselor can go over your budget and loan options with you. Find one through the CFPB’s housing counselor search or call HUD at 800-569-4287.

If debt is the part that’s hard to sort out, the National Foundation for Credit Counseling can connect you with free or low-cost counseling at 800-388-2227.

Read more >> First-Time Homebuyer Programs: What’s Available in All 50 States

How to prepare your credit for a home purchase in 2026

Start before you apply. Your credit affects whether you’re approved and what rate you’re offered, and some of the steps below take months to show up on your reports.

Check your credit reports now

You can get free reports from Equifax, Experian, and TransUnion every week at AnnualCreditReport.com. Checking your own reports doesn’t affect your credit.

Pull all three, since a lender may look at each one. Look for accounts you don’t recognize, late payments you don’t remember, and balances that don’t match your statements. Then check your name and address. Old or misspelled versions are usually harmless, but an address you’ve never lived at can be a sign someone opened an account in your name.

‍Found something wrong? You can dispute it with the credit bureau for free. Disputes correct inaccurate information only. Accurate late payments and other negative items stay on your report. If an account isn’t yours at all, report it at IdentityTheft.gov.

If you do find an error, Kikoff’s AI Credit Disputes tool can help you generate a personalized dispute letter in a few taps.

Build payment history ahead of time

Payment history makes up 35% of your FICO Score, more than any other factor. Every on-time month adds to your record, and the earlier you start, the more months a lender will see.

• Set up autopay for at least the minimum on every card and loan, so a busy week doesn’t turn into a late payment.
• Get credit for rent you already pay. Your landlord probably doesn’t report your rent. A service like Kikoff’s Rent Reporting can add those payments to your reports.
• Add an account in your own name if your file is thin. If you don’t have many accounts yet, one that reports on-time payments gives lenders something to see.

One late payment doesn’t undo the rest of your record. The on-time months that follow still count.

Lower your debt-to-income ratio

Your debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes to debt payments. It isn’t part of your credit score, since credit reports don’t include your income. Lenders calculate it when you apply.

Here’s an example. Say you earn $6,500 a month before taxes. You pay $600 a month on a car loan and $150 on a credit card. That’s $750 a month going to debt.

That means today, about 12 cents of every dollar you earn goes to debt. Add the mortgage, and it’s about 43 cents. Pay off the card, and you get back to about 40 cents.

That’s still above the CFPB’s suggested 36%, so in this example, paying off the car loan or looking at a lower-priced home could also help.

Read more >> What Credit Score Do You Need to Buy a House?

Bottom line

Home prices are still inching up in 2026, and mortgage rates are higher than most forecasts expected a year ago. Neither Fannie Mae nor the MBA sees a big drop in either one coming soon.

Getting approved is one thing. Your credit shapes the rate you’ll pay for the life of the loan. If you have time before you apply, Kikoff’s Credit Account reports your on-time payments to Equifax, Experian, and TransUnion. There’s no credit check to sign up, and plans start at $5 a month. If you’re applying soon, check with your lender before opening any new account.