Home Price Growth Is Slowing Below Inflation
Realtor.com just updated its 2026 housing forecast, and the headline number tells the clear story that home price growth is cooling faster than expected.
The company now expects existing home prices to rise just 1.2% this year, down from the 2.2% increase it projected back in December. That’s slower than inflation, which means home prices are effectively declining in real terms even as the sticker price ticks up.
Mortgage rates aren’t expected to move much either. Realtor.com left its rate forecast unchanged at an average of 6.3% for the year, while trimming its outlook for existing home sales slightly to 4.10 million from 4.13 million.
One of the more interesting shifts in the forecast is behavioral rather than numerical. Sellers are increasingly pricing homes realistically from the start rather than listing high and cutting later. That’s showing up in the data as fewer price reductions than last year, even as overall conditions favor buyers more than they have in some time.
With price growth slowing below inflation, monthly mortgage payments on new purchases are projected to decline roughly 1.9% this year. That’s a modest but real improvement in purchasing power for buyers who have been priced out or sitting on the sidelines.
None of this points to a crash. It points to a market recalibrating toward something closer to balance, and even a buyer-friendly one in many places, where buyers have more room to negotiate and sellers who price correctly the first time are still finding success. With income growth outpacing home price appreciation, buyers also need a smaller share of their paycheck to cover monthly housing costs than they did a year ago.
Whether you are buying, selling, or investing this year, understanding how national forecasts like this one play out in your local market makes all the difference. If you have questions about what these numbers mean for your plans, reach out anytime. I am always happy to talk through the details!
