As the U.S. residential real estate market enters 2026, there are positive signs for homebuyers, with modest improvements expected and continued stability for homeowners, according to experts from Zillow. After a period of significant market turbulence, trends are beginning to shift toward a more balanced market, providing some relief for prospective buyers while maintaining confidence for existing homeowners.
Recent forecasts indicate that home values are likely to experience slow growth throughout the year, with projected national growth ranging from 1% to 2%. This represents a steady, moderate increase compared to the rapid price escalations seen in recent years. While this growth may not be dramatic, it signals a shift toward a more stable housing market, which has been a relief for both buyers and homeowners. This more tempered growth may provide an opportunity for buyers who have been hesitant in recent years due to skyrocketing prices, allowing them to enter the market with a bit more affordability than before.
The number of existing home sales is also expected to rise compared to 2025, suggesting that the market will become more active as we progress through the year. This increase in sales could potentially bring more homes onto the market, increasing the available supply and offering buyers a broader range of options. A higher volume of homes for sale could alleviate some of the intense competition and bidding wars that have characterized the market in recent years, allowing for a less stressful home-buying experience for many.
Zillow economists also note that rent affordability may improve slightly in 2026, offering a bit of breathing room for renters and first-time buyers who have faced significant financial pressure. For renters, this could mean less strain on monthly budgets and the possibility of saving for a down payment. For first-time buyers, a slightly more affordable rental market could ease the transition from renting to owning, especially as rent growth has outpaced wage growth in recent years, making it difficult for many to accumulate enough savings for a down payment.
These trends suggest that the housing market will be more balanced than it has been in recent years. While the challenges of high mortgage rates will still influence affordability decisions, the overall market environment may feel more conducive to both buyers and homeowners alike. For homeowners, the combination of stable price growth and increased market activity offers reassurance, as the market remains relatively stable despite broader economic uncertainties.
However, mortgage rates continue to play a crucial role in shaping affordability, and they remain a significant factor in homebuyers’ decisions. While the potential for increased inventory and modest price growth may make homes more accessible, higher mortgage rates could still limit some buyers’ purchasing power, particularly for first-time buyers. For many, the decision to buy a home will depend on how these mortgage rates evolve throughout the year.
For homebuyers, the outlook for 2026 is one of cautious optimism. With modest price growth and potentially greater supply, there may be more opportunities to enter the market. For renters, improvements in affordability could provide a pathway to homeownership. As 2026 unfolds, the residential real estate market is expected to be more stable and balanced, offering a more predictable environment for both buyers and homeowners, even as challenges like mortgage rates continue to shape the landscape.