As 2025 comes to a close, economists and real estate analysts are turning their attention to what lies ahead for the U.S. housing market in 2026 — especially in light of President Donald Trump’s proposed “aggressive” housing reform agenda. After years of high prices, tight inventory and elevated mortgage rates, 2026 is shaping up to be a pivotal year with potential shifts in affordability, price trends, and market activity.
While details of the Trump administration’s housing plan remain limited, headlines about a promised overhaul have sparked both interest and debate among industry watchers. Let’s take a closer look at what experts are forecasting for home prices, buyer prospects, and market dynamics in the coming year.
What Economists Are Predicting for 2026
Home Prices May Continue to Rise, but Slowly
Most forecasters agree that home prices are unlikely to plunge nationwide in 2026, despite lingering affordability challenges. According to recent market predictions, national home values are expected to increase modestly — by roughly 1% to 1.2% over the year.
This trend reflects a gradual normalization after years of rapid price growth. Analysts point out that while mortgage rates are expected to moderate slightly — potentially dipping into the low-6% range — they will remain elevated compared with the ultra-low rates of the early pandemic era. That puts a ceiling on aggressive price increases while preventing widespread price declines.
Affordability Could Improve, But Not Dramatically
Another theme in 2026 predictions is slowed price growth combined with modest mortgage rate declines, which may make homeownership more accessible for some buyers. Zillow and Redfin forecasts suggest that if mortgage rates ease — even just slightly — and if incomes continue to rise, affordability could inch forward for certain segments of the market.
However, experts caution that improvements may be incremental rather than transformative. Buyers in markets with low inventory could still face stiff competition and high entry costs, and mortgage rates above 6% will continue to weigh on monthly payments for many households.
Inventory and Sales Could See Shifts
One of the biggest potential impacts on pricing next year is inventory. Redfin has dubbed 2026 “The Great Housing Reset,” referring to the possibility that more homes will come onto the market as sellers adjust to higher borrowing costs and buyers respond to even modest affordability gains.
If listings increase and more buyers engage with the market, this could help balance supply and demand — a dynamic that historically eases upward pressure on prices. Still, inventory is expected to remain tight in many areas, especially high-demand metro regions.
How Trump’s “Aggressive” Plans Factor In
President Trump has repeatedly emphasized that 2026 will see aggressive housing reform efforts, aimed at reducing housing costs and boosting affordability. These proposals have included ideas such as easing regulations to spur construction and calling for more favorable policies to increase housing supply.
Although details are still emerging, some experts believe that policy changes could help over the long term, especially by addressing bottlenecks in new construction and zoning constraints. Yet many analysts also point out that the fundamentals of housing market pricing — supply, demand, interest rates and economic conditions — will likely have a more immediate impact on 2026 pricing trends than any policy reforms enacted in the short term.
In other words, while bold policy plans create headlines, market forces rather than mandates will largely shape price movement next year.
Factors Supporting Modest Growth
Mortgage Rate Trends
Mortgage rates, which climbed sharply in recent years, are expected to cool modestly in 2026. Forecasts suggest that even if rates remain above pandemic lows, a slight decline could encourage more buyers into the market, reducing the supply-demand imbalance and slowing price acceleration.
Wage Growth and Job Market
In parts of the country where job growth remains strong and incomes are rising faster than housing costs, the relative affordability gap could narrow. This environment may provide opportunities for buyers who have been priced out during the tightest periods of the market.
Regional Variation
Experts emphasize that housing markets are highly local. While certain areas may see price flattening or even slight declines, others — especially those with strong job markets and limited inventory — could experience continued price growth. For example, parts of the Midwest and Northeast are anticipated to see more balanced conditions in 2026, while markets in the Sun Belt may remain competitive.
Challenges That Could Influence Prices
Even if home price growth slows or stabilizes, notable challenges remain:
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High cost of new construction: Builders face elevated material and labor costs, limiting the pace of new home development.
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Affordability pressures for first-time buyers: High down payments and monthly payment burdens will likely keep some prospective buyers on the sidelines.
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Mortgage rate lock-in effect: Many existing homeowners are hesitant to sell because they hold low-rate mortgages from earlier years, reducing available inventory for buyers.
What This Means for Buyers and Sellers
For homebuyers, 2026 may offer incremental opportunities to enter the housing market as affordability psychology improves and price growth slows. But sustained affordability improvements will likely require a combination of rate declines, inventory expansion, and long-term policy change.
For sellers, a more balanced market may mean greater negotiation flexibility compared with the stark seller’s market of recent years, though prices are likely to remain elevated compared with pre-pandemic levels.
Overall, forecasts point toward a housing market in transition in 2026. Rather than a dramatic crash or instant relief for buyers, the market is expected to see continued but slower price growth, modest improvements in affordability and a gradual shift toward balanced conditions. While President Trump’s aggressive housing reform proposals could influence long-term structural changes, most economists believe that market fundamentals and economic trends will be the dominant drivers of home prices next year.
This article is for informational and educational purposes only and does not constitute financial, real estate or legal advice. Housing markets vary by region, and individuals should consult qualified professionals before making buying or selling decisions.