Monday Market Update: 2026 Real Estate Forecasts Are Here

See what CAR® and Fannie Mae® are projecting for sales, rates and affordability.

Welcome back friends! You know what we always say about the last quarter of the year, it’s when we get the first glimpse of what to expect in housing in the year to come. While there is no crystal ball, there is a lot of data and analysis that go into the predictions for the coming year. There are no guarantees that these forecasts are 100% accurate, but we do believe the general themes are likely indicative of what we will see in some parts of the country at some point in the year.

On A State Level

The California Association of Realtors® released their 2026 California Housing Market Forecast less than two weeks ago. The key summary is that California home sales are expected to increase by 2%, median price is projected to rise 3.6% while housing affordability improves slightly to 18% (over 16% and 17% in 2024 and 2025 respectively). C.A.R. Senior Vice President and Chief Economist Jordan Levine adds that “As economic uncertainty begins to clear up in the next 12 months and mortgage rates start declining more consistently in the upcoming quarters, housing sentiment will see some improvement in 2026.” Read the news release in full HERE.

On A Nationwide Level

Across the country, Fannie Mae® predicts that new and existing home sales will increase to 5.16 million in 2026 (from 4.72 million in 2025). The refinance share of mortgage applications is expected to grow from 26% in 2025 to 35% in 2026 – largely due to the anticipation that mortgage rates could drop to 5.9% by the end of 2026. Purchase activity is projected to increase in 2026 by 10% compared to 2025 and 15% compared to 2024, especially in Quarter 2 and Quarter 3 of the year. Read the summary and access the data HERE.

We hope that this week’s blog has inspired you to reflect on the market in 2025 and get excited about 2026. The best thing you can do is always what is best for YOU! Please let us know if you need help determining what factors are the most critical to your own decision-making process.

All my best,

Bobbi

Bobbi Decker
DRE#00607999

Broker Associate, Bobbi Decker & Associates
650.346.5352 cell
650.577.3127 efax
www.bobbidecker.com
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