Is now a good time to buy a house?

Buying a home is one of the biggest financial decisions you can make. But in today's housing market, it's not always clear when to make your move. As a result, many buyers are asking the same question: Is now a good time to buy a house, or is it better to wait?

If you're thinking about buying in 2026, several factors may influence your decision—and your purchasing power. Here's what to expect from the housing market this year, including mortgage rates, home prices, inventory and regional trends.

US housing market forecast for 2026

The housing market has been challenging in recent years, particularly for first-time homebuyers. The pandemic reshaped demand, with buyers fiercely competing for limited inventory as mortgage rates fell to historic lows that were near 3%.

In 2025, however, the market began to stabilize. The 30-year fixed mortgage rate eased slightly to around 6.2% to 6.3% by the end of the year—although still elevated compared to the roughly 4% averages seen in the decade leading up to the pandemic. At the same time, home price growth slowed and inventory began to improve, with the median home sale price falling from $423,100 in the first quarter of 2025 to $405,300 in the fourth quarter of the same year.

While housing affordability remains a challenge, the real estate market appears to be moving toward a more balanced footing in 2026.

Will mortgage rates go down in 2026?

While mortgage rates have eased slightly, most experts don't expect them to fall below 6% in 2026.

Even if the Federal Reserve cuts rates, it may not directly translate into lower mortgage rates because the Fed doesn't directly impact mortgage rates or other long-term rates. The federal funds rate influences short-term rates, and mortgage rates are influenced by multiple economic factors outside of the Fed's control.

Will home prices increase in 2026?

Several factors are expected to influence home prices in 2026, with limited inventory remaining a key driver. Many real estate market predictions for 2026 call for modest home appreciation, with values expected to rise about 1% to 3% nationwide.

That said, trends will likely vary greatly by region. While parts of the South and West are seeing more stable or flattening prices, midsize cities across the Great Lakes region and Northeast—where home values have already climbed 16.3% year over year—are expected to see continued growth in 2026.

These predictions could shift if mortgage rates decline more than expected. Lower rates typically attract more buyers, which could increase demand and push home prices higher. At the same time, broader economic factors—including global tariffs—could raise construction and material costs, adding further upward pressure on prices.

Will housing inventory improve in 2026?

Housing inventory shortages have been a challenge in recent years. While inventory has improved from record lows, it hasn't returned to pre-pandemic levels. Many homeowners who locked in historically low mortgage rates are reluctant to sell because purchasing a new home at today's rates would likely mean a higher monthly payment.

New construction may help, but progress is gradual. According to the National Association of Home Builders, or NAHB, rising material costs, elevated labor prices and ongoing labor shortages continue to be a challenge. As a result, the NAHB expects only a modest 1% increase in single-family home construction in 2026.

In some markets, inventory is likely to remain tight. This means buyers may continue to face strong competition, and limited supply is likely to keep upward pressure on home prices—particularly for entry-level homes.

Is it a good time to buy a house?

Many prospective homebuyers are weighing whether to buy a house now or wait for lower rates and more inventory. While pricing and availability are key considerations, it's also important to evaluate the long-term benefits of homeownership. If you're trying to decide whether it's better to buy or rent in 2026, there are a several factors to consider.

In addition to providing a place you can make your own, homeownership can offer:

• The opportunity to build equity over time
• Protection against rising rent costs
• Potential tax advantages, depending on your situation

It's also worth noting that the average US homeowner moves every 5 to 7 years. This means the mortgage rate you receive today may not be the rate you keep in the long term—especially if refinancing becomes an option in the future.

How to prepare to buy a house in today's market

If you're planning on buying a home in 2026, preparation can make all the difference. Here are six strategies to help you move forward.

1Check your local housing market forecast

Housing prices, inventory and overall competition will vary significantly depending on your location. For example, Redfin predicts that markets in Texas and Florida—areas that saw rapid growth during the pandemic—may continue to cool in 2026, driven in part by rising insurance costs and increased exposure to natural disasters.

At the same time, so-called refuge markets—particularly Great Lakes cities like Milwaukee, Grand Rapids, Cleveland and Buffalo—are becoming increasingly popular due to their relative affordability compared to larger nearby cities.

Working with a local real estate agent can help you better understand pricing trends, inventory levels and competition in your target market.

2Get your finances in order

Taking time to prepare your finances is one of the most important steps in the homebuying process—particularly for first-time homebuyers. A stronger credit profile and larger down payment can improve your mortgage terms and help lower your monthly payment.

The following steps can help you financially prepare to buy a home.

• Check your credit score. If your credit score needs improvement, it may be worth taking a few months to strengthen it.
• Pay off debt. Reducing credit card balances, paying off outstanding loans and requesting higher limits on existing credit lines can all help improve your debt-to-income ratio, which lenders use to evaluate your borrowing power.
• Save for a larger down payment. While a 20% down payment isn't required for many borrowers, putting more money down can reduce the amount you need to borrow and lower your overall interest costs. A larger down payment may help you avoid having to purchase private mortgage insurance.

3Assess your budget

Take a close look at your income, debt and savings to determine what you can realistically afford in today's rate environment. With mortgage rates still elevated compared to recent years, monthly payments can be higher than many buyers expect.

A common guideline is to spend no more than 28% of your monthly gross income on housing costs—including your mortgage payment, property taxes and homeowners insurance. For example, if your household earns $6,000 per month before taxes, you should have a target housing budget of about $1,680 per month.

While this rule can be a helpful starting point, your ideal budget may vary based on your financial goals and other obligations.

4Explore available programs

A range of homebuyer assistance programs may help make buying a home more attainable. Government-backed home loans—such as those offered through the Federal Housing Administration, US Department of Veterans Affairs and US Department of Agriculture—can provide more flexible qualification requirements, lower down payments and reduced interest rates for eligible buyers.

In addition, many lenders—including First Citizens Bank—offer down payment assistance programs for first-time homebuyers, military service members and public service professionals, such as teachers and healthcare workers.

Your mortgage banker can help you understand which programs you may qualify for and guide you through the mortgage application process.

5Expand your search

If single-family homes are out of your budget, consider expanding your search to include condominiums or townhomes. Relative affordability is one of the most significant benefits of buying a condo, particularly in today's housing market.

If you're willing to take on renovations, foreclosures may be another option worth considering. While buying foreclosed homes involves some level of risk, they're often competitively priced. As a result, they may offer an opportunity to build equity quickly.

6Don't try to time the market

It can be tempting to wait for lower mortgage rates, but doing so may come at a cost. Lower rates often drive increased demand, which can lead to higher home prices.

"While buyers might save money with a lower rate, higher home prices can quickly offset these savings," says Robert Fong, Senior Director of Mortgage Capital Markets at First Citizens. Instead, he recommends focusing on what works best for your unique financial situation. "Trying to find the absolute best time to buy is difficult and can often lead to missed opportunities," he explains.

The bottom line

The 2026 housing market is expected to be more stable than in recent years, but affordability challenges remain. If you're planning to buy, focus less on timing the market and more on your financial readiness. Understanding your budget, exploring available programs and staying informed about local trends can help you make a confident decision.

Your mortgage banker can also provide valuable guidance—helping you prepare your finances, evaluate your borrowing options and identify any homebuyer programs you may qualify for.