Forecast Shows Home Prices Falling in Much of the South and West in 2026

By Mary Cunningham | CBS News

It’s still a tough time to get a foothold in the housing market, with homes sitting near record values and mortgage rates parked well above 6%. But the tide could turn in 2026, with property prices forecast to dip in 22 of the largest 100 U.S. cities and mortgage rates expected to ease slightly, according to a new analysis from Realtor.com.

The real estate market is expected to move in a more “buyer-friendly” direction next year, leading to the “most balanced housing market” since the pandemic, meaning that neither sellers nor buyers are likely to have the upper hand in negotiations, said Jake Krimmel, a senior economist at Realtor.com.

Mortgage rates are expected to dip to an average of 6.3% next year, a slight drop from 2025’s 6.6% average rate. Lower borrowing costs, as well as strong wage growth next year, should encourage more buyers to jump into the market, Krimmel added.

“2026 is going to be a year where we think the market is going to steady,” Krimmel said. “It’s going to show a lot of signs of getting back on track to what we consider to be normal.”

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