The housing market is expected to gradually rebalance in 2026, according to Zillow’s latest forecast, as mortgage rates moderately ease. Home values are projected to end the year roughly unchanged (+0.9%) while existing home sales are expected to increase modestly after a flat 2025.

Home values are projected to end 2026 roughly unchanged (+0.9%). The number of active home listings is expected to increase less in 2026, as new listings and sales increase at roughly the same pace. That balance between supply and demand should keep prices relatively stable.

Existing home sales are projected to reach 4.2 million in 2026, reflecting a 3.9% increase from just over 4 million in 2025. However, still-elevated mortgage rates and affordability challenges will keep gains in housing activity somewhat modest, even as conditions for home buyers slowly improve. Moderately easing mortgage rates are expected to unlock some pent-up demand, supporting a gradual recovery in transactions. Even with that improvement, sales would remain below historical norms.

Zillow projects single-family rents to rise by 1.1% annually as of December 2026, while multifamily rents are expected to remain somewhat flat (-0.2%). Both forecasts reflect a rise in vacancies coming from more multifamily units still under construction and soon to hit the market. Persistently soft rent growth suggests renters will retain negotiating power while landlords face limited pricing momentum.