Home prices are set to grow at their slowest pace in years — and this time, inflation is winning.
Realtor.com’s midyear forecast update projects just 1.2 percent price growth in 2026, trailing projected inflation of 3.4 percent, which means home values are effectively declining in real terms even as sales inch upward for the year. The revised figure is down from a 2.2 percent forecast in December.
What this means for buyers
The monthly mortgage payment for a typical 2026 buyer is now projected to be 1.9 percent below last year’s, Realtor.com said, exceeding the 1.3 percent decline originally predicted. Combined with income growth, the shift means a smaller share of a paycheck is needed to cover housing costs even as mortgage rates hold steady.
“The housing market is inching forward as sellers reset expectations, price growth cools, and buyers gain more negotiating power,” Danielle Hale, chief economist at Realtor.com, said in a statement.
Sellers adjusting earlier
Sellers are lowering asking prices upfront rather than cutting them after listing, Realtor.com said, resulting in fewer price reductions than in 2025. Realtor.com attributed the slower price growth to more balanced conditions across many markets.
“This is a market where people are adjusting and showing up rather than giving up,” Hale said. “Sellers are meeting the market with more realistic asking prices, which is helping deals get done.”
Rates hold steady despite easing hopes
Mortgage rate projections remain unchanged at 6.3 percent for the year, Realtor.com said, as inflation and a resilient labor market offset lower rates seen earlier in 2026. Inflation reached a three-year high of 4.2 percent in May, according to Realtor.com.
Market expectations for rate cuts shifted after February strikes on Iran, Realtor.com said, with markets now anticipating one to two rate hikes by December rather than the one to two cuts priced in before the conflict. The 10-year Treasury yield has held between 4 percent and 4.5 percent for the year, keeping mortgage rates in the 6 percent to 6.5 percent range, according to Realtor.com.
Sales edge higher despite a slow start
Existing-home sales are expected to reach 4.10 million in 2026, a 1.0 percent increase over 2025, Realtor.com said, down slightly from the 4.13 million originally projected in December. Sales trailed year-ago levels in January, February and March before steadying in April and climbing in May, according to Realtor.com. Year to date, sales are running 0.2 percent ahead of last year’s pace.
“Buyers and sellers have shown a lot of staying power this year,” Hale said.
A wildcard: Private listings
Realtor.com flagged the continued growth of private listing networks, homes marketed off the multiple listing service or outside search portals, as a factor to watch in the second half of 2026. Realtor.com noted limited evidence so far that private listings are affecting sales or prices, though the effect could be showing up in inventory data.
“Sellers who go private are trading away visibility and competition among buyers, and that competition is usually what pushes a sale price up,” Hale said. “For buyers, it means they aren’t seeing every home or the whole market, making it harder to know what a fair price even looks like.”
