Home price growth rate is projected at just 1.2% for 2026, below 3.4% inflation. See what it means for buyers, sellers and mortgage rates.
The home price growth rate is on track for its weakest showing in years, with Realtor.com now projecting just 1.2 percent price growth for 2026, well below the 3.4 percent inflation rate forecast for the same period. That gap means homes are effectively losing value in real terms even though sales are expected to tick up slightly this year.
In Brief
- Realtor.com cut its 2026 home price growth forecast to 1.2 percent from 2.2 percent in December.
- Inflation hit a three year high of 4.2 percent in May, outpacing home price gains.
- Mortgage rates are projected to hold at 6.3 percent for the year.
- Existing home sales are expected to reach 4.10 million, up 1.0 percent from 2025.
- Private listing networks are being watched as a possible wildcard for inventory and pricing.
Why the Home Price Growth Rate Is Falling Behind Inflation
Realtor.com's midyear update marks a notable downgrade from its December call. Back then, the firm expected 2.2 percent price appreciation for 2026. Now it sees growth of only 1.2 percent, while inflation is expected to run at 3.4 percent over the same stretch. In plain terms, a home that doesn't outpace inflation is quietly losing purchasing power for its owner, even as the sticker price stays flat or edges higher.
Danielle Hale, chief economist at Realtor.com, described a market where participants are recalibrating rather than retreating. Sellers are resetting expectations, price growth is cooling, and buyers are picking up some negotiating leverage they lacked a year or two ago.
What Slower Price Growth Means for Buyers
There is a silver lining buried in these numbers. The typical monthly mortgage payment for a 2026 buyer is now projected to run 1.9 percent below what buyers paid last year, a bigger drop than the 1.3 percent decline Realtor.com had originally forecast. Paired with rising incomes, that means a smaller slice of household paychecks is going toward housing costs, even with mortgage rates parked at elevated levels.
Sellers, meanwhile, appear to be adjusting their strategy rather than their nerves. Realtor.com says sellers are pricing homes more realistically from the start, rather than listing high and cutting later. That has led to fewer price reductions this year compared with 2025. Hale framed it as a market where people are showing up and adapting instead of giving up on deals altogether.
Mortgage Rates Stuck Near 6.3 Percent
Hopes for meaningful rate relief have not materialized. Realtor.com's mortgage rate projection remains unchanged at 6.3 percent for 2026, as sticky inflation and a resilient labor market cancel out the lower rates seen earlier in the year. Inflation reached 4.2 percent in May, a three year high, according to Realtor.com's figures.
Rate cut expectations also took a hit after February strikes on Iran shifted market sentiment. Where investors had priced in one to two rate cuts by December before the conflict, they now anticipate one to two rate hikes instead. The 10 year Treasury yield has stayed in a 4 percent to 4.5 percent band all year, which has kept mortgage rates parked in the 6 percent to 6.5 percent range.
Sales Inch Up After a Rocky Start
Existing home sales are projected to hit 4.10 million for 2026, a 1.0 percent gain over 2025, though that is a slight trim from the 4.13 million Realtor.com projected back in December. Sales lagged year ago levels in January, February and March, then stabilized in April and picked up in May. For the year so far, sales are running 0.2 percent ahead of last year's pace, a modest but real sign of staying power among buyers and sellers alike.
Private Listings Could Complicate the Picture
One factor Realtor.com is watching closely for the rest of 2026 is the growth of private listing networks, homes marketed away from the multiple listing service or public search portals. So far there is limited evidence that these off market deals are moving overall sales or prices, though Realtor.com suggests the effect may already be showing up in inventory data that undercounts available homes.
Hale warned that sellers who go private are giving up visibility and the buyer competition that typically drives prices higher. For buyers, it means missing a slice of the market entirely, which makes it harder to judge what a fair price actually is. If that trend accelerates, it could muddy read on the true home price growth rate well into next year.
Frequently Asked Questions
Will home prices increase in 2026?
Yes, but only modestly. Realtor.com projects 1.2 percent price growth for 2026, which trails the 3.4 percent inflation forecast for the year.
Will home prices increase in 2025?
Realtor.com's data shows sales and prices in 2025 served as the baseline against which 2026 figures are compared, with price growth already cooling before this year's downgrade to 1.2 percent.
Will home prices increase in 2027?
The source material does not provide a specific 2027 forecast. Current trends, including slowing price growth and steady mortgage rates near 6.3 percent, suggest continued moderation is likely absent major economic shifts.
What is the home price growth rate?
As of the 2026 midyear forecast, the home price growth rate is projected at 1.2 percent, down from an earlier December estimate of 2.2 percent.
Will home prices increase in 5 years?
Long range forecasts were not detailed in the available data. Near term, growth is expected to stay well below inflation, which limits real gains for homeowners in the immediate years ahead.
