Realtor.com® 2026 Forecast Update: Home Price Growth To Cool Further, Trailing Inflation

Realtor.com® 2026 Forecast Update: Home Price Growth To Cool Further, Trailing Inflation

Mortgage Rate Prediction Remains the Same, Yet As Home Prices Fall Behind Inflation the Cost Burden for Buyers is Easing

AUSTIN, Texas, July 8, 2026 /PRNewswire/ -- Home price growth is now expected to slow to just 1.2% in 2026, a slower pace than originally forecast and one that fails to keep pace with inflation, meaning home prices are effectively declining in real* terms, according to the Realtor.com^® 2026 Forecast Midyear Update. The cooldown on home price growth comes as a resilient economy has kept mortgage rates high, offsetting rate relief seen earlier in the year.

Realtor.com^® has also trimmed its 2026 existing-home sales forecast to 4.10 million, down from the 4.13 million projected in December, though the number of sales is still expected to grow 1.0% over 2025, as momentum builds in the second half of the year. Rental prices, meanwhile, are on track to fall again in 2026.

"Against a backdrop of both familiar and new challenges, the economy has proved resilient. As a result, the first half of 2026 delivered stability more than momentum in the housing market," said Danielle Hale, chief economist at Realtor.com^®  "The housing market is inching forward as sellers reset expectations, price growth cools, and buyers gain more negotiating power. Looking ahead, we expect momentum to build through the second half of the year as more sidelined buyers and sellers find terms that work for both sides."

Realtor.com^® 2026 Forecast for Key Housing Indicators

*Growth rate as published calculated from then-projected 2025 totals, existing home sales of 4.07M and single-family starts of 0.97 million.

Inflation, Middle East Conflict Keep Mortgage Rates Elevated
Mortgage rate projections are unchanged at 6.3% as a fresh round of inflation combined with economic resilience, particularly in the labor market, has offset lower than expected rates in the first few months of the year. Inflation hit a three-year high of 4.2% in May, wiping out that month's wage gains and raising fears of broader price pressure. The Fed's June statement, issued after Chair Kevin Warsh's first meeting, bluntly vowed to deliver price stability, lifting short-term rate expectations.

Timing points to geopolitics driving that shift: markets had priced in one to two rate cuts by December before the February strikes on Iran, but now expect one to two hikes instead — a nearly full-point swing resulting from the conflict's effect on oil and inflation. Still, the 10-year yield has held between 4% and 4.5%, keeping mortgage rates in the 6%–6.5% range for the year.

Home Sales Shake Off a Slow Start, Expected to Be Lower Than Predicted
Home sales in 2026 are expected to see modest year-over-year improvement to 4.1 million, marginally lower than in our original forecast. Existing-home sales trailed the year-ago pace in January, February and March, even as mortgage rates briefly dipped below 6% at the end of February. When conflict broke out in the Middle East and rates shot back up, it raised the possibility that buyers would pull back. Instead, sales steadied in April and climbed more convincingly in May. Year to date, existing-home sales are running just 0.2% ahead of last year's pace. Realtor.com^® expects growth to pick up in the second half of 2026, though by less than originally forecast, bringing the annual total to 4.10 million, up 1.0% from 2025.

"Buyers and sellers have shown a lot of staying power this year," said Hale. "This is a market where people are adjusting and showing up rather than giving up. Sellers are meeting the market with more realistic asking prices, which is helping deals get done."

Price Growth to Cool Further Improving Affordability for Buyers
Home price forecast has been revised down to 1.2% in the year, a slower pace of growth than originally expected. Year-to-date prices are up just under 1% over the prior year. Realtor.com^®'s revised forecast reflects slower growth amid more balanced, even buyer-friendly, conditions in many markets. Sellers have adjusted by lowering asking prices upfront rather than cutting them later, so listings are seeing fewer price reductions than last year.

Affordability has improved even more than expected: the typical 2026 buyer's monthly payment is now projected to come in 1.9% below last year's, beyond the 1.3% drop in the original forecast, as the mortgage rate outlook held steady while price growth expectations softened. Combined with stronger income growth, that means a smaller share of a paycheck is needed to cover housing payments. With inflation expected to run at 3.4% for the year, home price growth will not keep pace with inflation. This means that housing costs for buyers are effectively shrinking relative to other household expenses.

Homeownership Rate Improvement
May sales data and a higher-than-expected first-quarter homeownership rate of 65.3% prompted an upward revision to Realtor.com^®'s full-year homeownership outlook. Young households are still navigating a market where affordability is improving only slowly and a record-high share of 18- to 34-year-olds live at home. Yet among those who do strike out on their own, more are choosing homeownership.

Homebuilding Navigates Headwinds as Opportunity Varies Regionally
Lower spring borrowing costs, despite the post-conflict uptick, helped lift existing-home sales activity. New-home sales, by contrast, have softened as the mortgage rate buydowns and price cuts that drew buyers to builders when rates were higher lose their pull and listing prices stabilize. Builders are managing their pipelines accordingly, pulling back on permits and starts most sharply in the South and West, regions that typically drive the bulk of national construction and have more fully recovered from supply shortages. The national homebuilding deficit still stands at an estimated 4 million homes, leaving the greatest opportunity in the Northeast and Midwest, where shortages remain most acute.

Rents Continue to Fall
Renters are expected to see continued relief through the end of 2026 as a relatively robust multifamily construction pipeline adds to supply and pushes rents down further. The Realtor.com^® rent growth forecast now calls for a 1.2% decline in 2026. Vacancy rates, which already registered 7.3% in the first quarter, are expected to end the year roughly in line with the 7.2% long-term average from 2013-2019.

Whether that relief continues largely depends on supply keeping pace with rental demand. Additional rental supply remains vital to sustaining that relief. First-quarter multifamily starts were relatively robust, but they slipped sharply in May. This is likely more noise than signal but is worth watching closely: if supply keeps pace with, or outpaces, demand, rents should continue to soften; if construction slows before demand catches up, the relief could stall or reverse.

Wildcard: The Growth of Off-Market, Private Listings 
A wildcard to watch in the second half of 2026 is the continued growth of private listing networks — homes marketed off the MLS or outside search portals, either temporarily or permanently. So far, there's limited evidence they're affecting sales or prices, but the effect could be showing up in inventory, as homes may be marketed and sold privately before reaching the MLS. For now, the more immediate risk is to home buyers and sellers.

"Keeping listings off the open market changes the equation for everyone involved," said Hale. "Sellers who go private are trading away visibility and competition among buyers, and that competition is usually what pushes a sale price up. For buyers, it means they aren't seeing every home or the whole market, making it harder to know what a fair price even looks like. That's a real cost with real consequences and is something we should be cautious of as the market is starting to find its footing."

Note: Throughout this release, "real" refers to figures adjusted for inflation, as distinct from "nominal" figures, which reflect raw dollar or percentage changes without that adjustment.

About Realtor.com^®
For over 30 years, Realtor.com^® has connected buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 real estate site REALTOR® agents recommend, Realtor.com® delivers consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media contact: Mallory Micetich, press@realtor.com

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SOURCE Realtor.com