Housing Market Predictions 2022: Will It Drop? - Ramsey Solutions

If you’re wondering what the 2026 housing market forecast may look like—whether prices will fall, rates will drop, or a crash is coming—you’re not alone. The real estate market has seen a lot of unusual trends in the past couple of years, so it makes sense that you’d want to get a 2026 housing outlook before you make any major decisions.

Here’s the thing: Housing market predictions are about as reliable as weather forecasts. Real estate professionals make their best predictions based on data, but no one can know what’s going to happen with 100% accuracy. Plus, national predictions don’t always match what’s happening in your local market since housing trends vary a lot by zip code.

Still, you can listen to what the experts are saying and make some pretty good guesses. Just remember—never let a market prediction control your housing decisions. Only your personal situation and finances should do that!

With that said, here’s what experts predict for the 2026 real estate market.

What Will Interest Rates Be in 2026?

The interest rate on a 15-year fixed mortgage is forecasted to dip from an average of 5.8% in 2025 to an average of 5.2% in 2026.1,2 That may not seem like much—but compared to the 7% highs we saw in 2023, it’s a welcome shift.

In the chart below, I’ve also highlighted 30-year rates. Notice how much higher those are compared to the 15-year rates. That’s one of the reasons why I only ever recommend getting a 15-year fixed-rate mortgage when you buy a house.

Mortgage Type	2025 Average Rate (January–November)3	2026 Prediction (Econforecasting)	2026 Prediction (Fannie Mae)
15-Year Fixed	5.8%	5.8%4	5.2%*
30-Year Fixed	6.6%	6.5%5	6%6

*Fannie Mae only predicts interest rates for 30-year loans. So, I took the average difference between 30-year loans and 15-year loans in a 12-month period (November 21, 2024, to November 20, 2025—0.82 percentage points) and subtracted that number from Fannie Mae’s 30-year prediction to estimate the 15-year prediction (6% - 0.82 = 5.2%).

Keep in mind, many factors influence how lenders set rates—including economic hoopla (like changes to the federal funds rate, the 10-year treasury yield, and job reports). So don’t bank on predictions that change with the wind. Date the rate, marry the house. If you wait forever for the “perfect” rate, you might miss the right home—and a lower price. If you’re financially ready to buy, now’s the time to get started.

Why Mortgage Rates Matter

Lower rates increase your buying power. Even a 0.5% rate drop can save you tens of thousands of dollars over the life of a 15-year loan. Want to see how a lower rate could add margin to your home-buying budget? Try our free Mortgage Calculator.

Will Home Prices Go Down in 2026?

No, home prices aren’t expected to go down any time soon. But they aren’t expected to skyrocket either. Fannie Mae and the National Association of REALTORS® predict home prices will increase by 2.1–4% in 2026.7,8 Fannie Mae also expects similar moderate price growth in 2027.

What does that look like in a dollar amount? If we take the median home sales price in the second quarter of 2025 and multiply it by the predicted price increase for 2026 ($410,800 x 2.1–4%), we see that prices could increase to around $419,000–427,000 in 2026—that’s about $9,000–16,000 higher compared to 2025.9

2025 Median Home Price	2026 Median Home Price (Predicted)	2027 Median Home Price (Predicted)
$410,800	$419,000–427,000	$431,000–439,000
+3%10	+2.1–4%	+2.9%11

No Housing Market Crash in Sight for 2026

If you’re concerned about a housing crash in 2026, you can put those worries to rest. Prices are not going to start drastically going down anytime soon.

The main thing to know about the housing market is that home prices are determined by inventory (also known as supply) and demand. Here’s what you can expect in each of those areas.

Housing Inventory

Housing inventory simply refers to the number of houses for sale. When fewer houses are available, buyers are willing to pay more, and sellers have more leverage to up their asking price. Simply put—low inventory leads to higher home prices. It’s a big reason why buying a home has gotten so expensive.

When it comes to housing inventory for 2026, things are currently looking up! October 2025 marked the 24th straight month of year-over-year inventory growth. Even better news: The number of homes on the market in October was 15% higher than a year earlier.12

Now, while inventory is increasing, it’s still nowhere close to pre-2020 levels. So you shouldn’t get your hopes up about seeing any kind of major price adjustment. But this is still a great sign because more inventory usually gives buyers more negotiating power and slows rapid price growth.

Buyer Demand

Buyer demand in real estate refers to how many people are looking to buy a home—and how eager they are. One way to gauge demand in the market is by how many homes sell for more than their listing prices. In October 2025, that number was 25%.13 Around the same time, the number of buyers applying for a home mortgage was up 31% compared to last year.14

Overall, buyer demand has stayed steady over the last few years—mostly due to low inventory that never seems to catch up. Since 2022, demand has followed a predictable seasonal pattern—higher in summer, lower in winter. If interest rates dip in 2026, demand could surge quickly—so buyers who are financially ready now should snag a home sooner rather than waiting.