A Slow-Motion Rebalance with Danielle Hale

The 2026 housing market forecast shaping up at Realtor.com is a slow-motion rebalance rather than a sudden correction. Mortgage rates are expected to hold near 6.3 percent, home sales to recover modestly, and affordability to ease gradually as real prices soften and incomes catch up. That is the picture Realtor.com Chief Economist Danielle Hale lays out in the latest Disposition Dialogue with Auction.com Head of Marketing Daren Blomquist. The full conversation traces where rates, sales, prices, and distress risk head through the rest of 2026 and into 2027.

The 2026 housing market forecast at a glance

Per Realtor.com Chief Economist Danielle Hale in the episode:

• 30-year fixed mortgage rate holding near 6.3 percent in 2026
• Nominal home prices up roughly 1  percent to 2 percent, a real decline once inflation is factored in
• Existing-home sales up about 3 percent year-over-year in recent months

• Where Realtor.com sees mortgage rates and home sales landing in 2026 and 2027
• Why the rebalancing is playing out slowly, and what is finally eroding the mortgage rate lock-in effect
• What a shift toward buyer-leaning markets means for pricing distressed and bank-owned assets
• How local conditions, from crowded households to new-construction policy, factor into the outlook

Rates are the gravity holding this market down, and Realtor.com does not expect them to fall much in 2026. Hale’s forecast puts the 30-year fixed rate near 6.3 percent for the year, with the low-6 percent range likely to persist rather than dipping below a 6percent floor. Early 2026 came in stronger, she notes, before conflict-driven uncertainty pushed rates back toward 6.5 percent.

Home sales tell a more hopeful story. After several years stuck near 30-year lows, existing-home sales in recent months picked up roughly 3 percent year-over-year, ahead of the modest 1 percent gain Realtor.com had penciled in for the first half. Hale expects the second-half outlook, due shortly after taping, to run a touch more optimistic, though not by much. Sales, in her framing, will keep climbing out of the slow period rather than taking off.

The reason sits with the same rate math. Many homeowners locked in historically low payments during the pandemic and giving that up is a hard trade. Hale walks through how that lock-in loosens over time in the episode, along with what her team is watching for 2027.

The market is correcting, but in slow motion, and Hale sees that as the healthiest path available. Because transaction volume is low, prices are adjusting gradually instead of lurching. Nominal home prices are still rising, on the order of 1 percent 2 percent by Realtor.com’s estimate, while inflation running higher means real prices decline even as that figure ticks up. That gives incomes room to catch up and the payment share of income room to shrink, without producing big winners and losers overnight.

One quiet milestone captures the shift. For the first time in a recent quarter, the share of homeowners carrying a mortgage rate above 6 percent surpassed the share below 3 percent, according to FHFA data Hale cites. The lock-in effect that froze so many owners in place is starting to thaw, slowly.

Where a given market sits on that path is the part worth watching. Realtor.com’s Market Clock reads the national market as roughly rebalanced right now, with parts of the South and West tilting further toward buyers. In the episode, Hale pinpoints the specific metros and what a buyer-leaning market asks of sellers.

For anyone bringing distressed assets to market, the signal is to price to the market in front of you, not the one behind you. Blomquist notes that in softer, buyer-leaning areas, sellers of distressed and bank-owned properties are increasingly doing what home builders already do: adjusting pricing to meet demand, and reporting solid results when they do. Demand has not disappeared; the pricing expectation simply has to move with the local cycle.

That makes local reads more valuable than national averages. Hale is direct that housing is local, and the same forecast can point in opposite directions two metros apart. A buyer-leaning market rewards realistic reserve pricing at auction; a tighter one is more forgiving when it comes to pricing.

The through line across the conversation is patience: a market easing back toward balance one quarter at a time, with the local picture doing most of the work. For the sellers and buyers active in distressed real estate, the practical edge is reading that local shift early and pricing to it. Danielle Hale’s full breakdown, including the metros and risks she is tracking, is in the episode.

Click above to watch Danielle Hale’s complete 2026 outlook, the Market Clock breakdown, and where she sees distress risk building.

• Realtor.com forecasts the 30-year fixed mortgage rate holding near 6.3 percent in 2026 and staying above 6 percent into 2027 (Danielle Hale).
• Home sales are recovering modestly, up about 3 percent year-over-year in recent months after years near 30-year lows.
• Nominal home prices rise roughly 1 percent to 2 percent, but real prices decline once inflation is factored in, giving affordability room to improve.
• The mortgage rate lock-in effect is easing: the share of owners above 6 percent now tops the share below 3 percent, per FHFA data Hale cites.
• Buyer-leaning markets reward realistic reserve pricing; sellers of distressed assets are increasingly pricing to the local cycle.

• How escrow-driven payment shocks could raise delinquency risk
• Who buys at auction, and how local buyer behavior shapes strategy
  
• Read the latest auction buyer survey findings