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Housing Market 2026: 3 Predictions for Home Prices, Mortgage Rates, Sales
Business Insider • • business
Key Points:
- Capital Economics forecasts a significant slowdown in the US housing market, with annual home sales potentially falling to 4.7 million by 2026, the lowest since 2011, and a subdued recovery expected through 2028.
- Mortgage rates are projected to remain above 6% for at least two more years, driven by inflation concerns and Fed rate hikes, which will continue to constrain homebuying activity.
- Home prices are expected to see the slowest growth in 15 years, remaining flat in 2024 and only modestly increasing by 2.5% in 2027 and 4% in 2028, reflecting weak demand due to high borrowing costs.
- A potential 20% correction in the S&P 500 by late next year could further depress housing demand and home prices, though a severe downturn is unlikely unless the US enters a recession.
- Despite these challenges, Capital Economics anticipates the housing market will avoid a severe crash, supported by a resilient job market and overall economy.
