Home prices held just about flat over the last 12 months around $357,445 according to Zillow, inching up just 0.2%.
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Where will home prices go in 2026? Not all economists agree.
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The Case for Negative or Flat Growth
Rod Skyles, aka The Unconventional Economist, pointed out the historically high ratio of home prices to household income. A study by Harvard’s Joint Center for Housing Studies released in late 2025 found home prices now average five times median household incomes, compared with 4.1 in 2019 and 3.2 in the 1990s.
“From here, either prices begin to correct, or prices stay level until incomes catch up, which could take a decade or more,” Skyles said.
Skyles isn’t alone in that opinion. An analysis by J.P. Morgan projected 0% home price growth in 2026. The authors point to the increase in new home supply offsetting the minor expected uptick in buyer demand.
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The Case for Slow Growth
Most economists forecast 1% to 3% home price growth in 2026. On the low end, Redfin predicted 1% growth, while Realtor.com projected 2.2% and the National Association of Realtors estimated 2% to 3%.
Mariano Torras, Ph.D., economics professor at Adelphi University, foresees inflation outpacing home prices, but doesn’t see much to celebrate. “Working people remain priced out of entry-level homes, even as nominal growth is poised to cool below inflation in real terms,” Torras said.
Mortgage rates remain top of mind for most analysts. In late February, mortgage rates dropped below 6% to their lowest level since 2023. Lower mortgage rates mean lower monthly payments for the same size loans, so buyers can afford to bid more. That typically drives home prices higher, negating any affordability boost.
The Case for Accelerating Growth
While no mainstream economists have staked their reputations on fast home price growth in 2026, some see it as a real if unlikely possibility.
If mortgage rates fall faster than expected, that could send home prices spiking. For instance, the Realtor.com report forecasts rates ending the year at 6.3%, but they’ve already dipped below 6%. “The appointment of Kevin Warsh as Fed Chair signals faster potential rate cuts, which would increase demand for single-family homes,” said Brandon Parsons, Ph.D., economist at Pepperdine Graziadio Business School.
Even bearish Skyles sees a path to faster home appreciation. “The government continues to overspend, causing excess dollar printing and inflation to pay the bills. Hard assets like real estate retain value, so property values could jump in nominal price to reflect a less valuable dollar,” Skyles said.
Will home prices rise in 2026? Probably. Will they outpace inflation? Most economists don’t think so.
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This article originally appeared on GOBankingRates.com: Economists Disagree on Where Housing Prices Will Go in 2026: Here’s What They’re Saying
