After years of turbulence marked by soaring prices, rising mortgage rates, and a 30-year low in existing home sales in 2023, the global housing market is showing early signs of a cautious recovery in 2026. Experts project modest price gains, gradually easing mortgage rates, and a slow but meaningful increase in both inventory and sales activity.
Prices and Rates: A Balancing Act
Home prices are forecast to rise between 1.2% and 1.7% in 2026 — a far cry from the double-digit gains of the pandemic era, but a sign of stabilisation. The 30-year fixed mortgage rate currently stands at roughly 6.65–6.75%, and analysts anticipate it will ease slightly to around 6.5% by year's end. On 15-year fixed loans, rates are holding near 5.6%.
The number of major metropolitan areas experiencing annual price declines is expected to fall from 24 markets to 12 by the end of the year, suggesting that the correction phase is narrowing and more markets are returning to positive price growth.
The housing market is healing, but slowly. Improving affordability is bringing demand back, though we remain well below pre-pandemic transaction levels.
Sales and Inventory Trends
Zillow projects 4.26 million existing home sales in 2026, representing a 4.3% increase over 2025. While this is a meaningful improvement, activity remains sluggish compared to historical norms — existing home sales have not fully rebounded since hitting that 30-year low three years ago.
On the supply side, approximately 1.41 million homes were available for sale in July 2026, up 1.5% from a year earlier. New listings have risen 3.1% year-over-year, suggesting that more homeowners are willing to enter the market despite the "lock-in effect" of their existing low-rate mortgages.
Regional Variations Tell the Story
The recovery is playing out unevenly across regions. Inventory surged in Minneapolis (+19%) and Seattle (+17%), giving buyers more options and negotiating power. In contrast, supply tightened in San Francisco (−16%) and Miami (−15%), where demand continues to outpace available homes.
Harvard's Joint Center for Housing Studies notes that affordability remains the central challenge, with housing costs continuing to outpace income growth in many markets. The report highlights the need for sustained increases in housing supply — particularly in the mid-price segment — to meaningfully improve access for first-time buyers and moderate-income households.
Sources:
Zillow Research — 2026 Housing Market Predictions
Zillow — Housing Market Trends for Fall and Winter 2026
National Association of Realtors — 2026 Real Estate Outlook
Harvard JCHS — Ten Takeaways from the 2026 State of the Nation's Housing
Ramsey Solutions — Housing Market Predictions for 2026