After years of record-setting demand and intense competition, the real estate market is entering a new chapter. The 2020s have been marked by a notable imbalance between buyers and sellers due to limited inventory, rapid price appreciation, and an onslaught of bidding wars that gave sellers the upper hand—but that dynamic has been shifting. While the market remains active, the latter half of the decade is expected to bring more modest, sustainable growth.
STABLE APPRECIATION
NAR Chief Economist Lawrence Yun predicts home prices to increase by 4% in the new year. Other forecasters agree that prices will rise, though they’re slightly less optimistic than Yun. Redfin, Zillow, and Realtor.com foresee appreciation reaching between 1-2.2%.
Historically, the annual appreciation rate for US homes is around 4%. Over the last 5 years, values climbed at more than 2x the normal rate. According to the FHFA House Price Index, 10-year values doubled with a 57% increase since the start of 2020.
As growth stabilizes, sellers should keep in mind that now is not the time to “test the waters” by pricing high. As reported at the NAR Real Estate Forecast Summit, “Homes priced even 3–5% above market will face longer days on the market and deeper eventual reductions.”
CLIMBING SALES
Improved affordability will allow more buyers to enter the market in the coming year, though there isn’t a clear consensus due to economic uncertainties regarding tariffs, wage growth, and inflation. The NAR optimistically predicts a 14% increase in existing home sales during 2026. Realtor.com, Redfin, and Zillow offered more conservative estimates ranging between 1.7-4.3%.
Bright MLS anticipates a 9% boost in home sales with chief economist, Lisa Sturtevant, calling 2026 a “a reset year, not a rebound.” Sturtevant further noted, “Market performance will hinge on local economic conditions, making 2026 one of the most geographically divided markets we've seen in years."
As far as geographical divides go, Toledoans are in luck! The good old Glass City was ranked #4 on Realtor.com’s Top Markets of 2026. Cities were determined by the sum of expected sales and price growth rates—factors that show strong demand and better value than nearby high-cost hubs. Realtor.com predicts a marginal decrease of -1.2% in Toledo’s existing home sales with a 13.1% jump in YoY median sale price.
REDUCED RATES
Mortgage rates have been dropping in recent months after hovering near 7% for most of the year. The annual average 30-year fixed rate is 6.75%. There have been three Fed rate cuts in 2025, with the most recent occurring this month. As of December 10, average rates were around 6.34%. NAR, Zillow, Redfin, Realtor.com, and Bright MLS are forecasting average mortgage rates between 6-6.3%.
As Zillow chief economist Mischa Fisher explains, “Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand. Each group should have a bit more breathing room in 2026.” Likewise, the NAR described next year’s market as one of opportunity.
Cheers to 2026 and all the doors it opens!