US housing market participants forecast 6-6.4% mortgage rates in 2026, ‘two-speed’ markets in terms of pricing
U.S. housing industry participants are predicting increasing divergence in the national housing landscape, USA Today reports.
Odeta Kushi, First American’s deputy chief economist, told the publication that the U.S. housing market is now a “two-speed” consisting of regions that are growing and regions that have become too risky/expensive in the last few years.
Less housing inventory in the Northeast and Midwestern U.S. “will keep conditions relatively tight and price growth stable,” while prices in the Southern and Western U.S. “will remain soft,” Kushi wrote in his report. Rising insurance and other costs in coastal areas could affect prices, he added.
Bright MLS Chief Economist Lisa Sturtevant also predicts higher prices in the Northeast and Midwest regions of the country, particularly San Francisco and San Jose. Areas such as Florida and Texas, as well as Seattle, Portland and Denver, are expected to see “cooler” prices due to increased housing stock and reduced demand.
What are the mortgage rate predictions for 2026?
The 30-year fixed mortgage loan interest rate in the USA was 6.64% on average throughout 2025, as calculated in the first week of December, in line with the predictions made last year. Now, for 2026, the industry is forecasting between 6-6.4%; a slight decrease.
Will home prices in the US increase in 2026? Industry says…
Additionally, according to the report, most participants predict that housing prices will increase by a few percent in 2026.
- Sturtevant from Bright MLS: up 0.9%
- Mortgage Bankers Association: down 0.3%.
- POMEGRANATE: 4% increase
- Realtor.com: “Home prices will rise 2.2%, but real (inflation-adjusted) home prices will fall slightly for the second consecutive year.”
But in the report, Realtor.com chief economist Danielle Hale noted in a note that as more homes become available, buyers will have better “bargaining power,” which will increase affordability. “Young and first-time buyers will continue to face financial barriers,” he added.
