Housing affordability in 2026: Can buyers catch a break? ​

Buyers may catch a break in 2026, depending on what they are looking for. There are several factors that contribute to housing affordability that may ease up next year. Of course, no one can say exactly what the future of the housing market will look like.

If you delay buying a home to see if mortgage rates drop in 2026, you may risk rates rising to an unaffordable place. It is smart to get a mortgage and buy a home when you can afford to, and refinance your mortgage when rates drop.

Housing affordability references the relationship between housing costs, like rent or mortgage payments, and total household income.

Experts suggest that when figuring out if a home is affordable the maximum income a family should put toward rent or mortgage payments is 30%. Any more than that could put strain on the finances of a household.

To find out how much your mortgage payments would be, you can get pre-approved today!

Three big factors that shape housing affordability are home inventory, income and the mortgage you choose.

When there is a greater home inventory, prices tend to drop to attract buyers. When home inventory is smaller, prices tend to increase. With home prices increasing, it can be harder to find and afford a home that fits your needs while staying on budget.

If your income is increasing with the rise of home prices, you won’t notice much change in housing affordability. If your income stays the same while the prices of homes increase, the amount of home you can afford without going over the suggested 30% could decrease somewhat.

When looking to choose a mortgage that will help make housing more affordable in 2026, finding the right lender can make all the difference. Senior Vice President of Mortgage Lending, Kristin Dail, said, “The key is partnering with a lender who can match the mortgage to the buyer’s budget and strategy.”

Talking on the ways a buyer could expect to see a lender assisting them, Dail explained, “they can help craft a strategy that fits the buyer’s financial picture and long-term goals, whether that involves a rate buydown, lower down payment programs or adjustable terms.”

With experts predicting that mortgage rates will drop and more potential buyers will join the housing market in 2026, home prices are predicted to rise slightly.

In its Nationwide Forecast, the National Association of REALTORS® (NAR) Chief Economist Lawrence Yun indicated home prices could increase up to 4% in 2026. With median existing home prices at $409,200 in November 2025, if the NAR’s predictions are correct, the median home price across the nation in 2026 could reach up to $425,568.

Depending on what you are looking for, there are some ways in which 2026 may be easier for first-time homebuyers.

If mortgage rates drop, first-time homebuyers could get a loans without having to spend as much on monthly payments. The potential lower monthly payments can make mortgages more affordable for first-time homebuyers.

The NAR also expects that more homes will be sold in 2026, which could mean there are more buyers in the housing market. More buyers tends to mean more competition and higher home prices to match. If these happen, it could make the 2026 housing market a little tougher for first-time homebuyers.

If you are looking to boost buying power in a tight market, one thing you could do is work with a real estate agent.

A real estate agent can not only help you navigate a tight market but also help negotiate a fair price for you. A professional real estate agent could help boost your buying power by working with sellers to help a property fit your budget.

To help you confidently navigate the housing market in 2026, you should consider getting a mortgage pre-approval.

A pre-approval for your mortgage can show you the terms and amount you will qualify for. This will let you plan your monthly expenses after buying a home as well as allowing you to just focus on looking at homes you could afford.

With the potential of more homebuyers on the market in 2026, a pre-approval can be shown to sellers when you find the perfect house for your situation. This means that you won’t need to wait for a lender to approve your mortgage and risk someone else making an offer on your dream home.

Start your pre-approval application today to get ready for the 2026 housing market.

_{All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate. Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.}

_{Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.}