Average mortgage rates are expected to remain above 6 percent next year, rising from about 6.25 percent in early 2026 to 6.15 percent in the fourth quarter as economic conditions ease.

Existing home sales are forecast to climb 9% to 4.51 million—still lower than prior activity but up from recent lows.

Inventory is projected to increase by about 11 percent by the end of the year, reaching about 1.426 million homes for sale and pushing the national supply above 2019 levels.

The median home price is expected to be about $7,417,560, an increase of 0.9%.

Roshan MLS added that some parts of the country will see lower prices, particularly markets where supply has increased sharply.

“The 2026 housing market will be characterized by uncertainty – economic, demographic and regional,” said Lisa Sturvant, chief economist at BrightMLS. “Although low mortgage rates and high inventory will bring some buyers back, this will be a reset year, not a rebound year.

“Market performance will depend on local economic conditions, making 2026 one of the most geographically fragmented markets we’ve seen in years.”

By turning local conditions

Roshan MLS offers a wide range of experiences for homes depending on where they live.

The price increase is expected to strengthen supply-challenged markets in the Midwest and Northwest.

The same is said for tech-heavy markets like San Jose, California, and San Francisco, where renewed demand is helping steady prices.

Cooler conditions are expected in parts of Florida and Texas — where listings have surged — and in Seattle, Portland, Ore., and Denver, where demand has moderated since the pandemic.

National inventory is expected to return to pre-season levels as new construction sits higher on the market and more homeowners list after decisions have been delayed during a period of high interest rates.

Sturtevant noted that buyers will generally have more options, although a less competitive environment will not be universal because supply is limited in many areas.

Low mortgage rates and increased supply are expected to bring first-time buyers and homeowners back into the market—especially in the second half of 2026.

Affordability challenges will remain, but the bright MLS expects demand from households that have delayed buying to renovate.

Possible wild cards

Several risks are noted in the forecast that could change the outlook, including.

Mortgage Rates: Rates are expected to decline, but persistent inflation, geopolitical developments or large federal deficits could put more pressure on borrowing costs. Jumping rates can slow buyer traffic.

AI and Tech Sector Volatility: Investments tied to artificial intelligence could boost housing demand in some regions, while furloughs or stricter return policies could hurt it in others, including tech hubs and federal employment centers.

High-end buyers: Wealthy households were active at the end of 2025. If this continues, some markets may also see price increases as affordability for entry-level and middle-income buyers is put under pressure.

Policy Changes: A possible shift towards privatization Fannie Mae And Freddie Mac or other federal housing policy changes could affect mortgage access, especially for first-time and low-income buyers. Any interruption in government guarantees could also signal higher rates or more prudent lending.