Every major economist is predicting real estate prices remaining flat to falling modestly in 2026. How accurate are these predictions? Is there a scenario where prices buck every prediction and rise later this year? A prior survey shows a radically different prediction. What big changes could cause the swift change in market beliefs?
What is the current consensus on real estate prices
Well’s Fargo did a good analysis on the future of the housing market:
- Slower Growth, Not Collapse: While a “housing recession” might occur due to high rates, Wells Fargo anticipates continued, albeit slower, national home price appreciation, not a sharp decline, with projections for growth in 2025 and 2026.
- Affordability Challenges: High mortgage rates significantly impact affordability, dampening buyer demand and leading to builder sentiment drops, as seen in the January 2026 NAHB/Wells Fargo Housing Market Index.
- Market Differentiation: Prices in overheated pandemic markets (like the Mountain West) are more vulnerable, while desirable areas with tight supply should see prices hold up better.
- Price Cuts & Incentives: Builders are responding with price cuts and incentives (like 40% cutting prices in January 2026), especially in the lower-to-mid ranges, as shown in this Instagram post from Homes.com.
- Future Outlook: Wells Fargo economists see rising insurance costs and high prices challenging the market, but anticipate potential relief from falling rates and steady, though not booming, construction, as detailed in this Investopedia article.
In Summary: Don’t expect a national price crash, but rather a slow, uneven market with continued price growth in some areas and more localized adjustments, influenced heavily by interest rates and builder actions
What factors could lead to rising prices?
Based on what I am seeing and feeling in the market, I’m starting to question whether the predictions, including my own, might not be accurate for 2026. There are some interesting factors that could radically alter predictions:
- Ban on investors buying real estate: Although it is supposed to lower house prices, I think banning large investors will force builders to cut future supply as one of the largest buyers of new houses were rent to own companies
- Continued stock market appreciation: The stock market continues to increase and looks set for continued records in 2026 which leads to the wealth effect and could encourage profit taking and reinvesting in real estate.
- Fannie/Freddie buying more mortgage bonds: This is a novel idea, increase buying of mortgage securities by Fannie/Freddie to drive rates down. During the pandemic, the US treasury greatly reduced mortgage rates by buying huge quantities of securities. The issue is buying large tranches of securities is not a sustainable strategy for lower rates, but over a short period of time it could reduce rates like we are seeing today.
With real estate looking up for later this year, here is what the readers of this blog selected as the best real estate investments for 2026.
On the flip side long term challenges for housing prices
Although real estate is looking more positive for 2026, there are still some fundamental issues that will long term drag on housing prices.
- Rising insurance and taxes: The total cost of ownership is rising. In the last 4 years property taxes have surged almost 30% on average across the country as values have increased substantially. Insurance rates have also been soaring in almost every state making it more and more expensive to own a house.
- Long Term US budget issues: Although interest rates have recently fallen, the long term structural budget issues in Washington will continue to drive rates considerably higher than they should be due to huge debt.
- Federal Reserve independence: Fed independence prior to now had not been a huge risk factor, but in light of current political changes, there is a real threat to federal reserve independence that will ultimately increase rates due a “risk premium” of higher inflation.
- AI will displace many key buyers: Although we are just starting to understand the implications of AI, companies are already pulling back substantially on highly compensated well educated employees. These same employees facing a tough job market will be a drag on the
What should you do now in early 2026?
- Refinance: Take advantage of any drop in rates to substantially lower your costs depending on where your rate is now
- Uneven market: The market will not be like the Covid market where everything with four walls sold. There will be opportunities for good deals as there will be big winners and losers in the coming years
- Sell: if you had thoughts about selling in the next 2-5 years, now could be your best window before the market changes
Short term opportunity but long term structural issues
Based on the information I am seeing today, I think 2026 will be considerably better than what I predicted previously. We should see rates tick down a bit, while at the same time the stock market continues to hit records. These two factors should help keep the 2026 real estate market healthier than originally thought.
In the short term, real estate will feel the sugar high of lower rates and increasing stock market wealth. On the flip side, the events occurring in 2026 are not sustainable to long term drive the real estate market which means there will be a correction, but the correction is not likely in 2026. What this means is that you should take advantage of a dip in rates to refinance, sell if you are thinking of selling in the near term, and/or buy if you can find the right deal. Also know that the events shaping 2026 are not going to last long term which will lead to turbulence in the not to distant future.
Additional Reading/Resources
- https://realestate.usnews.com/real-estate/housing-market-index/articles/housing-market-predictions-for-the-next-5-years
- https://www.fairviewlending.com/best-2026-real-estate-investments/
- https://www.fairviewlending.com/what-happens-to-the-economy-one-year-from-now-is-there-an-upside-surprise/
- https://www.fairviewlending.com/americans-staged-a-property-tax-revolt-ga-led-the-way/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. I’m not an armchair reporter/writer. We are an actual private lender, lending our own money. We service our own loans and own commercial and residential real estate throughout the country.
My day job is and continues to be private real estate lending/ hard money lending which enables me to have a unique perspective on the market. I don’t accept any paid sponsorships or ads on my blog to ensure accurate information. I’ve been writing this for almost 20 years and have over 30k subscribers. Please like and share my blogs on linkedin, twitter, facebook, and other social media and forward to your friends 😊. I would greatly appreciate it.
Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, and Florida. We are recognized in the industry as the leader in hard money lending/ Private Lending with no upfront fees or any other games. We fund our own loans and provide honest answers quickly. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all we need is our simple one page application (no upfront fees or other games). Learn how to find a reputable hard money lender and why Fairview is the best hard money lender for investors.
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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