2026 Housing Forecast: Affordability Is Finally Catching Its Breath

2026 Housing Forecast: Affordability Is Finally Catching Its Breath

Spoiler alert: the housing market isn’t crashing… but it is calming down.

If the past few years felt like trying to buy or sell a home on “hard mode,” you weren’t imagining it. Affordability has been the single biggest hurdle keeping buyers and sellers stuck on the sidelines.

Here’s the good news: experts say 2026 is shaping up to be the most balanced housing market we’ve seen in years.
Not perfect but far more workable.

Let’s break down why affordability is improving and what it means for buyers and sellers heading into 2026.

Mortgage Rates: Lower Than Last Year, Likely Staying Put

Mortgage rates have already come down nearly a full percentage point from their peak and yes, that matters more than it sounds.

Experts expect rates to hover in the low 6% range through most of 2026, rather than swinging wildly. Translation? Less guessing, more planning.

Rates will still depend on:
• The overall economy
• Job growth
• Inflation trends
• Any policy changes from the Federal Reserve

But here’s the key takeaway: rates today are meaningfully better than they were a year ago and far more predictable.

For buyers:
Lower rates = lower monthly payments + better buying power. Homes that once felt out of reach may now be realistic.

For sellers:
The low-6% range appears to be the new normal. If you have equity and a reason to move, the math can absolutely work.

Inventory Is Growing (Yes, Really)

In 2025, housing inventory increased by roughly 15% nationwide, giving buyers something they hadn’t had in years:
options, time, and negotiating power.

According to Realtor.com, inventory is expected to grow by another 8.9% in 2026.

That may not sound dramatic but in real estate, steady beats sudden.

For buyers:
More listings mean more choices and less pressure to make panic decisions.

For sellers:
Pricing strategy matters again. The homes that sell are the ones priced right, not “hopeful.”

Home Prices: Still Rising-Just Not Like Before

Despite what some dramatic social media headlines suggest, experts overwhelmingly agree home prices are not falling off a cliff.

Nationally, prices are projected to rise about 1.6% in 2026 a slower, healthier pace that supports affordability without erasing equity.

Here’s the important nuance:
Real estate is local. Always.

Some markets will outperform the national average. Others may soften slightly. That’s why working with a local expert matters more than ever.

As Realtor.com explains:

“The shift signals a more balanced market one where price growth steadies, rate relief offers breathing room, and negotiating power tilts subtly toward buyers.”

For buyers:
Fewer surprise price spikes make budgeting easier and planning more predictable.

For sellers:
Slower growth doesn’t mean lost equity it means sustainability.

More Balance Means More Movement

When rates stabilize, inventory improves, and price growth moderates, something important happens:
people start moving again.

According to Zillow Chief Economist Mischa Fisher:

“Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand.”

In other words: both sides finally get some breathing room.

Affordability won’t magically fix itself overnight but 2026 is shaping up to be the most balanced housing market we’ve seen in years.

Expect:
• More predictability
• More options
• More reasonable negotiations
• Fewer extremes

What This Means for Our Local Markets

National trends set the stage but real estate decisions are made locally. Here’s how improving affordability could play out across our Midlands communities in 2026:

Columbia, SC

Columbia’s market remains diverse, with affordability varying significantly by neighborhood. As inventory improves, buyers may find more opportunity in established areas where price growth has steadied. Sellers who price strategically can still attract strong demand especially for well-maintained homes close to employment centers, universities, and medical hubs.

Lexington, SC

Lexington continues to benefit from strong schools, new construction, and steady demand. As mortgage rates stabilize, buyers may see less competition than in prior years, while sellers will need to be more intentional with pricing and presentation. Balanced conditions could favor move-up buyers who’ve been waiting for clarity.

Irmo, SC

In Irmo, affordability improvements may help buyers re-enter the market after sitting on the sidelines. Inventory gains could provide more options, especially in established neighborhoods near Lake Murray and major commuter routes. Sellers should focus on realistic pricing and condition to stand out.

Blythewood, SC

Blythewood remains a popular choice for buyers seeking newer homes and more space. As price growth moderates, affordability could open doors for first-time buyers and relocating families. Sellers may find success by aligning price with current market momentum rather than past peaks.

Lake Murray

Lake Murray properties continue to follow their own rhythm. While affordability gains may impact entry-level lake access and nearby communities, waterfront homes remain highly dependent on location, condition, and seasonality. Local expertise is essential when navigating pricing and timing in this market.

Why Local Insight Matters More Than Ever

While 2026 is shaping up to be a more balanced year nationally, no two markets or neighborhoods behave the same way. Understanding how mortgage rates, inventory, and price trends intersect locally is what turns information into opportunity.

📞 Contact The Sherpa Group Team to explore what these trends mean for your specific market and your next move.