Oregon — According to a new forecast from Zillow, the U.S. housing market is expected to see modest price growth and a gradual improvement in affordability through 2026, following several years of constrained demand and elevated mortgage rates.
Zillow projects national home values will rise 1.7% in 2026, reflecting softer demand and a growing supply of homes for sale. With inventory no longer as tight as it was during the pandemic-era boom, buyers are expected to gain more negotiating power and time to make decisions, while sellers continue to build equity at a slower pace.
Existing home sales are forecast to reach 4.1 million in 2025, a 0.8% increase from 2024. A more noticeable rebound is anticipated in 2026, when sales are projected to climb to 4.3 million—a 5.2% year-over-year increase—as mortgage rates trend lower and affordability gradually improves. Zillow expects the recovery to be led by the Southeast and West, regions where demand is more sensitive to interest rate changes.
Rental markets are also expected to cool. Single-family rents are projected to end 2026 up 1.6% year over year, down from an estimated 2.8% increase at the end of 2025. Multifamily rents are forecast to decline 1% in 2026, compared with projected growth of 1.4% in 2025, as high vacancy rates and new supply weigh on pricing.
While elevated borrowing costs continue to keep some would-be buyers in the rental market, Zillow expects easing mortgage rates in 2026 to slowly unlock pent-up demand. Overall, the forecast characterizes 2026 as a year of incremental improvement rather than a rapid rebound, marked by small gains in affordability and a more balanced housing market.
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