Will the housing market crash in 2026? It’s a good question, but the answer isn’t as easy as a simple “yes” or “no.” The 2025 housing market has been plagued by numerous challenges, causing buyers and sellers alike to struggle to make headway. These included stubborn mortgage rates, affordability concerns, and general economic uncertainty. However, experts remain optimistic that 2026 will bring about some positive changes for the real estate industry, as well as consumers. That said, next year won’t be without its share of hurdles. This post will examine the state of the market heading into next year. We will also draw on expert insights and market data to provide you with an idea of what to expect and attempt to answer the question of whether the housing market will crash in 2026.
Stubborn home prices have been a persistent pain point for would-be buyers in 2025. But experts predict that some relief is on the way next year, at least in some markets, which could create a path onto the field of play for those who have been sitting on the sidelines due to prohibitive pricing. However, nationwide, prices might still be a major blocker. A recent report from Realtor.com on the state of the housing market predicts price drops in 22 major cities across the United States, primarily located in the West or Southeast. Florida markets, such as Tampa and the North Port-Sarasota-Bradenton area, are expected to experience healthy pricing dips of 3.6% and 8.9%, respectively. Real estate market darlings like Miami will likely remain unreasonably priced for most Americans. Indeed, nationwide, Realtor.com also reports that overall, home sales might slow, as prices are expected to rise by 2.2%. “We are already seeing some price corrections, especially here in condos in South Florida. So, I believe buyers should actually take advantage of that now if they can,” Joel Freis, a South Florida real estate agent, tells HomeLight. Freis is a member of HomeLight Elite Agent Denise Madan’s team. “But at the very least, come the first part of next year, I think you’ll see prices drop or hold steady from where they’ve already come down or maybe come down a little bit more, and a low range of trade buyers will be able to capture good deals,” Freis adds. Both Freis and Madan are confident that the market will be resilient next year, rejecting the term “crash” and preferring instead to think of it as a potential market correction on the horizon. “The foreclosure market [in 2008] was super high. We’ve seen the correction now. Joel and I have done so many real estate owned properties over the last several years, and that market is [still] nothing like it was in 2008. People have equity in their homes right now. There’s no need to sell, and there’s no desperation like there was in 2008,” Madan tells HomeLight. Jason Huerkamp, a Minnesota real estate agent with over 20 years of experience, also rejects the idea of a housing market crash in 2026. “The last housing market crash happened in 2008, right? That was considered the biggest one anyway. Inventory really is still tight in most places,” he tells HomeLight. “Even with demand cooling, we’re not massively overbuilding like pre-2008, and in a lot of markets, quite frankly, there still are not enough homes. Lending standards are also stricter, so there are fewer ultra-risky loans, resulting in fewer forced foreclosures all at once.” Huerkamp also notes that while some markets, such as portions of the Sunbelt that experienced overheating in previous years, may see massive drops, industry forecasts generally predict incremental growth rather than a catastrophic failure. “Most forecasts see slower price growth, not a bubble popping, really,” he adds. One of 2025’s biggest challenges for buyers and sellers alike has been persistently high mortgage rates. While rates aren’t expected to make a massive shift next year, lenders and other industry professionals are confident that rates will drop to a more palatable level for home shoppers, pushing more buyers into the market, and giving sellers more incentive to trade up rather than wait for more favorable rates. Redfin predicts that mortgage rates will remain relatively flat, averaging around 6.3% next year, which may be enough to push buyers. “Buyers are going to have more control,” Huerkamp says. “We’re going to see more of a balanced market overall for buyers. Which is more healthy to be in, because quite frankly we’ve been in a seller’s market in most parts of the country for about the last five to six years and up until about eight months ago, and now we’re seeing quite a few markets that are either balanced or are actually buyer’s markets across the country,” he adds. Likewise, mortgage lenders are optimistic. 85% of lenders surveyed for HomeLight’s Lender Insights & Predictions Survey for 2026 expect a bump in mortgage originations next year. “We are heading into a shift. I believe we’ve hit our bottom for housing stagnation, and we will begin seeing a steady increase in home sales and a decrease in mortgage rates by the third quarter of 2026,” Shannon Herrmann, a loan officer in Montana, told HomeLight in the survey. Another trend from 2025 that is expected to continue into next year is the disparity in market conditions across regional, state, and city lines. The usual temperature checks for the health of a local market, such as days on market, median home prices, and inventory, will serve as indicators of market conditions, all of which can be expected to vary widely. Multiple listing service Bright MLS predicts that pricing will rise by 0.9% collectively, though it will differ significantly by region, as reported by Housing Wire. Bright MLS considers 2026 to be a “reset” year, rather than a “rebound”, expecting improvement in some markets, but not enough nationwide to trigger a recovery Consumer credit reporting company Experian notes that, based on analysis of data from the Federal Reserve Bank of St. Louis (FRED) and various industry experts, inventory levels are on a slight upward trajectory, but have yet to return to pre-pandemic levels. New construction is also not expected to be a significant factor in improving inventory. Experian is confident that the market will not experience a crash, calling it “unlikely” due to a lack of oversupply, risky lending, and other warning signs that are not present in the current real estate landscape. Huerkamp considers inventory levels to be one of the barriers to the market that buyers will need to be aware of next year, alongside interest rates. “The biggest pain points for buyers are that even though the market has basically shifted and slowed down a little bit, there is still a lack of overall inventory for buyers. I think their biggest pain point, however, for buyers is interest rates still sitting fairly high in the mid to low sixes,” he says. “If we saw an interest rate in the mid to low fives, I think this thing would just go crazy, and that might not be the healthiest thing. But overall, it’s interest rates and lack of quality inventory,” he adds. “We’d like to see a strong housing market in 2026. I know that when we have more inventory on the market for buyers, it helps everyone. Right now, the inventory we are seeing is increasing, but it’s not like it once was. It’s slowly getting there. So hopefully with the interest rates, that will make a difference for sure,” says Madan. With all that said, should you consider buying a home in 2026? As with all things real estate, the answer really depends on your income, where you want to buy, and if you have enough equity to leverage. First-time homebuyers are expected to struggle in 2026, as they did in 2025, with record-low numbers this year as a portion of the market share, primarily due to scarce home affordability. However, buyers and sellers from all walks of life are expected to share similar struggles next year, but there will also be some things for both demographics to look forward to. While economic headwinds, such as high unemployment rates, will loom over the real estate market for the foreseeable future, not all home shoppers and sellers will be as heavily impacted. According to Madan, sellers with homes in excellent condition are expected to do well. “I’ve never had buyers want something so perfect as we’ve seen in this past year. I mean, they want to have the impact windows. They want to have the new flooring. They want the new roof. They just want to walk in and have everything almost brand new, which we never seem to see the demand like that as we have,” she says. “They’re much pickier now, I believe. I think that for both the buyer and the seller, the buyer wants to have a house that doesn’t require a lot of rehabilitation or remodeling. And for the seller, if they want to sell their home quickly, they’ve got to have it in tip-top condition,” she adds. On the other hand, Huerkamp suggests that flexible buyers, those who might be willing to purchase a home in less-than-perfect condition, are also poised to do well in the face of an uncertain market. ”People who are willing to be flexible and take professional advice are going to be the people, whether you’re a buyer or a seller, that are going to succeed the most in 2026,” he adds. While we can’t tell you for certain if the housing market will crash in 2026 (even though it seems unlikely), partnering with a trusted professional today can help you get a better handle on the state of the market, and HomeLight has your back. We can help connect you with a top-performing, trusted real estate agent in your market in just a matter of minutes, providing you with the tools, knowledge, and peace of mind to buy or sell a home with confidence.Home prices are expected to soften…in some markets
Mortgage originations are expected to improve, despite stubborn rates
Inventory will be a question mark, but sellers will likely outpace buyers, depending on the region
Should you buy a home in 2026?
