Bright MLS 2026 Housing Forecast: Uncertainty and the Great Divide

North Bethesda, Md., Dec. 03, 2025 (GLOBE NEWSWIRE) --  Bright MLS, the nation’s largest MLS, today released its 2026 U.S. Housing Forecast, projecting a transition year in which easing mortgage rates and rising inventory help reset the market, even as broader economic uncertainty keeps a full rebound out of reach. There will be more opportunities and slightly improved affordability for buyers and sellers in many markets, but also a wide range of experiences depending on where they live and what they can afford.

Based on these dynamics, in 2026 buyers and sellers can expect to see:

• Average mortgage rates that remain above 6%, with modest easing throughout the year, moving from roughly 6.25% at the start of 2026 to around 6.15% by the fourth quarter as economic conditions soften.
• Existing home sales rising 9% year-over-year to 4.51 million, as pent-up demand and slightly improved affordability bring more buyers back into the market, though activity will still fall short of pre-pandemic norms.
• Inventory increasing nearly 11%, reaching 1.426 million homes for sale by year-end, giving consumers more options, bringing national inventory finally above 2019 levels.
• A national median home price of $417,560, representing 0.9% year-over-year growth, with no signs of a major nationwide price decline, but with prices falling in some high-inventory markets.
• A wide range of local market conditions in 2026, as regional economic and demographic trends lead to very different experiences for consumers. Expect stronger price growth in parts of the Midwest, Northwest and AI-driven tech markets like San Jose and San Francisco, and cooling conditions in places such as Florida, Texas, Seattle, Portland and Denver.

“The 2026 housing market will be shaped by uncertainty—economic, demographic and regional,” said Lisa Sturtevant, Chief Economist at Bright MLS. “While lower mortgage rates and more inventory will bring some buyers back, this will be a reset year, not a rebound year. Market performance will hinge on local economic conditions, making 2026 one of the most geographically divided markets we’ve seen in years.”

Key Trends and Wild Cards for 2026

While national averages provide a framework, local conditions and unexpected factors will shape consumer experiences in 2026. Buyers and sellers should pay attention to the following trends and potential surprises:

Key Trends

• Regional price divergence: Differences in local economic growth, tech and job market dynamics, demographics and migration patterns will fuel demand in some areas while slowing it in others. Stronger price growth is projected in the Midwest and Northwest, where inventory remains constrained. AI-driven tech markets, such as San Francisco and San Jose, are seeing a resurgence in housing demand and will also fuel stronger price appreciation in the year ahead. Cooler conditions are expected in Florida and Texas markets, where inventory has surged, as well as in Seattle, Portland and Denver, where demand has retreated since the pandemic.

• More inventory, more options:  By the end of 2026, inventory at the national level is projected to be back at pre-pandemic levels. More new construction lingering on the market, combined with some homeowners deciding to list after waiting out higher mortgage rates, will give buyers more choices and negotiating power. Not all buyers are going to experience a less competitive market in 2026, however, as supply constraints will persist in many markets.

• Demand reawakens: Lower mortgage rates and slightly higher inventory, which together make homeownership more attainable, are expected to bring first-time buyers and downsizers back into the market, particularly in the second half of 2026. While housing affordability will remain a challenge, buyers who have been on the sidelines, saving for a down payment and waiting for more negotiating power, will jump into the market next year. 

The Wild Cards

• Mortgage rates: Rates are expected to fall modestly, but rising inflation, larger federal deficits or geopolitical events could push them higher. An unexpected jump in mortgage rates could spook some would-be buyers, causing a pullback in demand in 2026.
• AI-driven growth: Tech and AI investment could boost demand in some markets, but disruptions or layoffs could dampen demand elsewhere. Layoffs or accelerated back-to-the-office mandates in some sectors could dampen demand elsewhere, making certain areas more volatile for buyers and sellers, including places like Seattle (Amazon headquarters) and the Washington D.C. area market (federal government).

• High-end buyers: Wealthier households drove housing market activity in the latter half of 2025, as these buyers and sellers felt more economically secure. If those high-end buyers continue to be active in 2026, we could see some markets where home prices continue to move higher, even where affordability is still a challenge for first-time and more moderate-income buyers.

• Policy shifts: Potential privatization of Fannie Mae and Freddie Mac or other federal policy changes could affect mortgage access, particularly for first-time and lower-income buyers. While there is significant uncertainty about the possibility and extent of privatization of the GSEs, mortgage rates could move higher, and lenders could be more cautious to hedge against any disruption to the government guarantee.

Bright MLS 2026 National Housing Metrics & Historical Data

To view Bright’s full 2026 housing forecast, please visit: https://brightmls.com/2026forecast

Methodology: Bright’s forecast is based on analysis of historic data from the National Association of Realtors, Freddie Mac, and the U.S. Bureau of Labor Statistics, and takes into account economic and demographic factors that will drive housing demand and supply in 2025.

Christy Reap
Bright MLS 
2023099362
christy.reap@brightmls.com