Should You Buy a House in 2026? Here's What's Ahead

Investopedia•January 4, 2026•business

Key Points:

Home sales remained near historic lows in 2025 due to high housing costs and elevated mortgage rates, but housing affordability is expected to improve slightly in 2026, potentially benefiting buyers.
Mortgage rates, which peaked above 7% in early 2025 and eased to around 6.2%, are projected to remain between 6% and 6.5% in 2026, with only modest declines expected despite Federal Reserve rate cuts.
Housing affordability varies regionally, with more affordable markets in the South and Midwest such as Cleveland, Cincinnati, and Oklahoma City, while coastal California and Northeast cities remain high-cost areas.
Adjustable-rate mortgages (ARMs) are gaining popularity, with about 10% of