The 2026 Housing Market Outlook: Will Inventory Finally Improve?

While no one can accurately predict what the housing market will look like, signs are pointing toward more homes being available for purchase in 2026.

Housing inventory is made up of existing and new homes. Existing homes are any properties that have been previously owned and occupied. New homes refer to all newly constructed homes during the year.

Understanding the housing market and what inventory may look like can help you get ready to buy a home in the new year.

Prepare for the 2026 housing market by getting pre-approved today!

The National Association of REALTORS® (NAR) predicts that the 2026 housing market will see a slight drop in mortgage rates as well as increases in sales of both existing and new homes.

The NAR also predicts that 2026 will see a slight increase in the median home price across the nation. The 4% increase in home price the NAR predicts could be due to the rise in both existing and new home sales, seeing the housing market slightly favor sellers in 2026.

While it is too early to know whether more sellers will enter the housing market, the NAR’s report for 2026 suggests it is likely.

With the 2026 housing market expected to slightly favor sellers in 2026, it would make sense that more homeowners will join the market. With the NAR predicting existing home sales will rise 14% and home prices rising 4%, it would make sense that homeowners will try to take advantage of the market favoring them in 2026.

However, existing homes are not the only option when looking to buy a home in 2026. Potential homebuyers could also consider homes constructed in the new year.

New home construction would boost supply in the housing market in 2026.

The National Association of Home Builders believes that 2026 will see a total of 1.05 million new homes built, up 4% from 2025. In its report, the NAR predicts that new home sales in 2026 will be up 5% from 2025. So you can expect to see more newly constructed homes on the market in 2026.

A major economic factor that will shape home supply in 2026 is mortgage rates.

If mortgage rates drop, as predicted by the NAR, potential homebuyers could end up paying less over the life of their loan. This may drive more buyers to the market, which could reduce home supply as they get bought.

Some predictions indicate that first-time homebuyers will have more options in the 2026 housing market.

“Qualifying for a new home (could) be easier in 2026,” Rate Senior Vice President for Mortgage Lending Christian Johnson said. “The ease will come from ... higher loan limits, but not necessarily from cheaper home prices.”

But despite stubborn home prices, potential buyers still have options.

“The increase of the conventional loan limit to $832,750 opens the spending limit for many Americans,” Johnson said. “Paired with minimum down payment option requirement of 3%, this is a first-time homebuyer’s gateway to ownership in high-cost markets.”

The best strategies for competing in a low-inventory market include looking out for newly listed homes and being prepared for when you find a home.

You can always search for homes online to see any newly listed properties. You can use an online home search engine to discover listed properties in your desired neighborhood or city.

If you don’t have the time or patience to watch for newly listed homes, you can consider getting a real estate agent to help out. A real estate agent can help you work through the real estate market by showing you homes that fit your needs and budget.

To be prepared for when you find your dream home, you can get a mortgage pre-approval before entering the housing market. A pre-approval will show you the terms of your mortgage, including monthly payments and your approved loan amount.

You can present your mortgage pre-approval when you find a home instead of having to apply for a home loan and risk being outbid as you wait.

To start getting ready to compete in a low-inventory housing market, you can begin your pre-approval application today!

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