Will the Housing Market Rebound? Predictions for 2025 and 2026

The U.S. housing market is expected to see gradual growth through late 2025 and into 2026, with no major price drops on the horizon.
Existing-home sales rose 2% in July 2025, inventory is up 15.7% year-over-year, and the median price is holding steady at $422,400.
Mortgage rates, a key driver of affordability, are projected to dip from ~6.4% in late 2025 to potentially 5.8–6.0% in 2026, which could bring more buyers into the market.
Home prices are forecasted to rise modestly, with regional differences playing a big role in affordability and opportunity.
Inventory levels are at their highest since 2020, giving buyers more choices than in recent years.