Cooling home price growth could improve affordability in 2026—but payments are still high

The story in one line

The housing market’s potential ‘affordability relief’ for the next year looks less like prices falling and more like price growth slowing—while mortgage rates remain the swing factor. Realtor.com’s midyear 2026 forecast update is a clear example of that shift. [realtor.com]

What the 2026 forecasts are signaling

Realtor.com now expects existing-home sales prices to rise **1.2% in 2026**, down from an earlier **2.2%** call. In other words: prices may keep moving up, but with less momentum. [realtor.com]

The forecast also points to an average mortgage rate around **6.3%** through the end of 2026. If that holds, affordability can improve gradually because payments stop getting worse—and incomes have a chance to catch up. [realtor.com]

One important nuance: Realtor.com notes this pace of price growth is expected to run **below inflation**, which means prices could be effectively lower in inflation-adjusted terms even if nominal prices are still edging up. [realtor.com]

What the latest weekly data says right now

Even with a cooler forecast, buyers are still shopping in an expensive present. Redfin’s weekly national estimates (as summarized by The MortgagePoint) put the **median sale price at about $408,838** for the four weeks ending **June 28, 2026**—a record high—and show a **median monthly mortgage payment around $2,633** at a **6.49%** mortgage rate. [themortgagepoint.com]

That combination helps explain why the market can feel ‘stuck’: modest changes in rates and prices can keep payments pinned near highs, especially when borrowing costs hover in the mid-6% range. [themortgagepoint.com]

Why affordability can improve without prices falling

Affordability improves when one (or more) of these things happens:

• **Mortgage rates fall** (or at least stop rising)
• **Income growth outpaces housing costs**
• **Home price growth cools** enough that buyers aren’t constantly chasing the market

In 2026, most forecasts are leaning on the third lever: slower appreciation. That’s still meaningful: if prices rise ~1% while incomes rise faster, the share of income needed for housing gradually comes down—even if the sticker price doesn’t. [realtor.com]

A market of splits: where strength and cooling can coexist

National averages hide big regional differences. Cotality’s May 2026 Home Price Index shows **0.8% year-over-year** national home price growth, but highlights both strong markets (e.g., San Francisco among the largest metros) and places that have cooled or even posted negative year-over-year changes. [businesswire.com]

Cotality also flags that many large metros are ‘overvalued’ relative to long-term income baselines, which can translate into a higher risk of price softness if demand weakens. That doesn’t guarantee a drop—but it’s a useful context when you see bidding wars disappear in one market while another keeps climbing. [businesswire.com]

Practical takeaways for buyers and sellers

**For buyers:**

• Run payment scenarios: a small move in rates can matter as much as (or more than) a small move in prices.
• In markets with rising listings, slower appreciation can mean more room for inspection credits, price negotiations, and fewer waived contingencies. [realtor.com]

**For sellers:**

• If the market is shifting toward ‘balanced,’ pricing close to today’s reality matters more than betting on next month’s appreciation. Realtor.com’s economists specifically point to sellers resetting expectations as part of how the market moves forward. [realtor.com]

**For everyone watching 2026:**

• The key question isn’t ‘Will prices crash?’—it’s whether price growth cools enough, for long enough, while rates stay stable, to let affordability improve in a durable way. [realtor.com]