In 2026, real estate trends will impact home ownership in America. Mortgage rates are expected to dip slightly, offering better affordability, especially in the Midwest and South. Consider adjustable-rate mortgages or new construction for value. Home sales near historic lows may improve slightly, creating opportunities for buyers.

Mortgage rates peaked at over 7% in early 2025 but eased to around 6.2% by the end of the year. Experts project rates to remain between 6% and 6.5% in 2026. Federal Reserve rate cuts have not significantly affected mortgage rates, which are expected to hover around 6%.

Despite high housing prices, affordability varies across the U.S. California and Northeast cities are costly, while some areas in the South and Midwest offer more reasonable prices. Cities like Cleveland and Detroit still provide affordable housing options with strong appreciation rates.

With mortgage rates at 6%, more borrowers are turning to adjustable-rate mortgages for lower initial rates. Approximately 10% of home borrowers opted for ARMs in September. While ARMs can offer savings, they come with risks if rates increase, though borrowers generally have better credit scores.

Newly constructed home sales are outpacing existing home sales, which remain at historically low levels. Builders are offering incentives to make new homes more competitive. Prices are high, but more affordable options are available in certain areas, providing opportunities for buyers. In August, new homes sold for an average of $413,500, lower than existing homes at $422,600. Builder incentives like mortgage rate buy-downs and reduced closing costs are driving new home sales. The limited inventory of existing homes is also making new home prices competitive, attracting buyers looking for value.

Read more at Yahoo Finance: Should You Buy a House in 2026? Here’s What’s Ahead