Market Forecast 2026

I’m hoping everyone is having a wonderful Holiday season and is spending it with friends and

family.

As we head into 2026, we’re moving out of what I previously described as the first period and into

a more transitional phase of the market. Home prices have continued to see modest appreciation,

still largely driven by constrained inventory. With the expectation of a new Federal Reserve chair

and a more accommodative rate environment ahead, mortgage rates are expected to trend lower

over time. Even so, affordability remains the primary challenge for many buyers, particularly those

who became accustomed to the pricing environment of the pre-2022 market. That sticker shock

hasn’t fully gone away.

Buyers relocating from out of state often experience this differently, as they’re coming from

markets with higher price points and a different set of comparable expectations. For local buyers

who do have the ability to purchase, the market remains relatively healthy. Inspections, price

negotiations, repair credits, rate buy-downs, and closing cost credits are still very much in play,

especially on homes that aren’t perfectly positioned or priced.

For buyers who are less rate-sensitive, 2026 can still present good opportunities when the right

property comes along. Likewise, if you’re planning to sell and also purchase another home, this

continues to be one of the healthier environments to do so before competition intensifies further

and pricing pressure increases.

As we move through the next period, mortgage rates are expected to continue drifting lower, in

part due to leadership changes at the Federal Reserve and a broader shift toward easing financial

conditions. Based on the last few years of market behavior, once rates move closer to the 6%

range, I expect to see a meaningful acceleration in buyer activity and overall sales volume.

Even as this occurs, inventory is likely to remain constrained due to years of underbuilding and a

large group of existing homeowners holding 3–4% mortgage rates who remain reluctant to sell.

The parts of the market that have been slower to move tend to share a combination of relatively

higher home prices, higher property taxes, and/or elevated HOA dues. Buyers are extremely

cost-sensitive right now and are evaluating the full cost of ownership, not just the purchase price.

Conversely, the areas that have moved the fastest this year are generally those with lower

property taxes relative to home values and fewer fixed ownership costs layered on top of the

mortgage.

Oregon will need roughly 500,000 additional housing units over the next 20 years and is currently

underbuilding by approximately 30,000 homes per year. I don’t see this imbalance being

meaningfully resolved in the next five years.

Economic Outlook & Oregon’s Appeal

The U.S. economy is currently projected to grow between 1.6% and 1.9% over the coming years.

Oregon remains an attractive place to live, with growing focus among state and local leaders on

strengthening the business environment, attracting investment, and supporting long-term job

growth.

Have a Happy New Year, and I look forward to seeing you in 2026.