Last Updated on January 8, 2026
Thinking about entering the real estate market in 2026? Leaders from Howard Hanna Allen Tate have come together to share their outlook for the year ahead. While no one can predict the future with certainty, our expectations align with insights from respected national real estate publications, providing a thoughtful, educated view of what next year may bring.
Interest rates
Industry leaders at Howard Hanna Allen Tate expect interest rates to trend lower, driven largely by job market conditions, with several predicting rates in the mid-5% range by mid to late year. Many agree that 6% has become a key psychological threshold, and breaking below it could significantly increase buyer activity and home sales. Supporting this outlook, industry forecasts suggest improving affordability, with mortgage payments on a median-priced home potentially dropping below 30% of median income for the first time since 2022.
- Gary Scott, President Howard Hanna Southeast, predicts a 5.5% interest rate by the third quarter.
- Mark McGoldrick, Executive VP of Sales, Howard Hanna Mortgage, believes the job market will heavily influence interest rates. A weaker job market will push rates down. If the job market stabilizes, trend line will get about 60 days, making rate drops more likely in the second half of the year. If the opposite is true and the job market gets weaker in January and February, the rates could drop for the spring market. If rates move to a range of 5.5% to 6%, home sales would increase significantly.
- Mike Grogan, Southeast Regional Vice President, Howard Hanna, states that 6% interest rate has become a “mental norm.” He anticipates that with the likely announcement of a new Fed president (Kevin Hassard is the front runner), there could be additional interest rate cuts. He predicts a 5-something percent interest rate by mid-year.
- Neal Hanks, President, Howard Hanna Beverly Hanks, hopes the rate falls below 6%, as he believes it is a “mental number” for many folks, and dropping below it could be huge for home buyers.
Inventory
Inventory is expected to rise into 2026, creating healthier conditions that could encourage more buyer activity. While some expect inventory to peak early in the year and then tighten if interest rates fall into the mid-5% range, others note that four to five months of supply may now represent a balanced, stable market. Supporting this view, forecasts project a modest 5–10% increase in inventory, with months of supply settling in the mid-fours, signaling continued market health.
- Phyllis Brookshire, SVP, Operations, Howard Hanna Allen Tate: Predicts that 2026 will bring a more balanced market. While some sellers fear a market not entirely in their favor, she notes that a balanced market is better for buyers and sellers, but that sellers should be realistic with their pricing for the best results.
- Gary Scott: Notes that six months of supply has traditionally signaled a balanced market, but now, four to five months may be the “new six,” which is still a good indication of a healthy market.
- Neal Hanks: Expects inventory to continue climbing in 2026, which he sees as a positive to drive home purchases.
- Mark McGoldrick: Suspects that nationally, inventory will peak in January 2026 and then shrink a bit, followed by more balance by Q4. If interest rates drop into the mid-fives, he thinks inventory will go down, as more buyers will enter the market.
Price appreciation
Industry experts largely agree that home prices will see modest appreciation, generally ranging from 1% to 4%, as rising inventory helps temper growth and support affordability. This level of steady, restrained price movement is viewed as healthy for the market, allowing values to rise without creating new affordability barriers.
- Neal Hanks: Predicts very modest price increases of 2–4%, due to rising inventory, which will help with affordability.
- Phyllis Brookshire: Believes 1-4% is a healthy amount of appreciation that is sustainable, and that’s exactly what we’ll see this year. Price appreciation in this range also significantly helps affordability.
- Gary Scott: Lands at 2–4% growth. Real estate prices have only gone down in four years over the last 30.
- Mike Grogan: Is in agreement with Neal, and sees growth being restricted by inventory. He notes that the $500,000 price point may be a “mental block” similar to interest rates.
- Mark McGoldrick: Expects “slight movement up” with appreciation likely in the 1% to 2% range.
Inflation
Experts agree that slowing job growth is placing downward pressure on interest rates, as softer payroll numbers, rising layoffs, and longer job searches reduce inflationary pressure. While a weaker labor market can weigh on consumer confidence, forecasts point to inflation settling near the Fed’s 2% target and unemployment around 4.5%, increasing the likelihood of lower rates.
- Mark McGoldrick: States that job growth is a major driver of interest rates and has gotten softer. Private payroll reports (ADP) have been down four out of the last six months. While their haven’t been a ton of layoffs, it’s taking longer to find new jobs, which is contributing to lower interest rates. Inflation is a “mixed bag,” but he believes there will be enough downward pressure. The Fed focuses on keeping inflation around 2%.
- Mike Grogan: Notes that the jobs number is a “double-edged sword,” where a downturn negatively affects consumer confidence but has the positive effect of lower rates.
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Howard Hanna Allen Tate Real Estate is the #1 real estate company in the Carolinas, with more than 75 offices and 1,800 agents serving communities across North and South Carolina. As part of Howard Hanna Real Estate Services, the largest family-owned and operated real estate company in the United States, Howard Hanna Allen Tate offers a full suite of real estate services, including mortgage, insurance, title and relocation. For more information, visit www.howardhannatate.com.
