2026 Housing Market Update | Will the market crash?

So everybody wants to know the same thing. Are we headed for a real estate market crash in 2026? No, no, no! Well, there were plenty of naysayers coming into 2025 saying the sky is falling and that we are not out of the rut yet. Well, over the last several months in 2025, we've seen some interesting trends emerge and not all of them are bad, but not all of them are good. In this video, I'm gonna be breaking down what Fannie Mae, as well as the National Association of Realtors, expect and predict for 2026. Mortgage rates, home prices, as well as inventory, and what it's gonna mean for buyers, sellers, and even investors. By the end of this video, you're gonna know exactly what to expect and how to position yourselves in a win-win situation as we start to see a stabilizing market. So let's kick it off by talking a little bit about interest rates. That's right, mortgage rates have been obscenely high. Now, I'd like to say they've only been high in 24 and 25, but in fact, we saw these interest rate hikes all the way back in 2022. It's been that long, that's right. Now, while 2024 was definitely hit hard as one of the worst housing markets since 1995 in home sales, we did think that we were going to see some reprieve in 2025 for mortgage rates. Unfortunately, although the powers that be had promised a reduction in interest rates, and while we did see them, we saw them go down, and then we saw them pop back up, and then we saw them go down, and then they came back up, and it's hitting us at an average between 6 1⁄2 to 7%, still a little bit too high for some people to make the move. Now, while we can always hash back and forth that back in the 80s, interest rates were 13, 14, 15, 18%, it's a little different. Houses are more expensive now. You can't get by on the same income and still purchase a home, and it has actually made the market currently unaffordable for many people to actually buy a home and has made renting a little bit more appealing. So what's gonna change in 2026? Now, while it's not going to be overnight, Fannie Mae predicts that the 30-year interest rate is gonna drop below 6%, probably landing somewhere around 5 1⁄2% by the end of 2026. Now, there's a lot that we are going to see, some ups and some downs through 2026, so don't get too stuck on that 5.9. It's not here yet, but it is coming. Now, we might not see 5.9 till the end of the year, but the National Association of Realtors has also added that we're expecting to at least see a solid 6% interest rates between that 6% and 6.3 throughout the 2026 year. So what's bringing about the change now? Well, interest rates were up because of inflation. That's right. Dropping those interest rates down in 2020 and 2021, were important to keep our economy flowing, because if you didn't know it, real estate's actually the backbone of our economy, the moving of money. So by doing that, it made sure people were flooding the market. We're not gonna see rates that low ever again. Knock on wood. If we do, that'd be amazing for some of us. That being said, though, the biggest push for this is the stabilization of our current inflation in our market and economy, and the Feds are planning on making cuts. Now, hopefully, all of these things fall into place, but there is a massive demand in the market for these interest rate cuts. Now, if you do want to go ahead and get lower interest rates right now, there are still ways to do this. If you're purchasing a home, you can also buy down rate, which means you buy points. You can also negotiate with a seller to pay for these points out of your closing costs. In addition to that, there's a lot of new construction, new home builders, offering phenomenal incentives. And in fact, some of these new builders are actually offering similar sized homes at a much lower price for new construction. Why? They want to keep the inventory moving, right? So you will see some builders locking in a 30-year fix at 4.99. Not saying which ones. Give me a call and I'll give you the list. So this slow and steady drop in interest rates in the market is not going to create an overnight frenzy, but it will make financing a little bit more approachable again, especially for those first-time home buyers that have been sitting on the sidelines waiting for their chance to get in the game. If you're looking for everything Charlotte, North Carolina and the upstate of South Carolina, when it comes to real estate and everything Charlotte has to offer, you have come to the right channel. Be sure to hit that subscribe button and be the first to know about all upcoming changes to the market. I'm Kayla Lindsay, your Charlotte, North Carolina, real estate expert. And every single day we're getting calls, texts, emails, Zoom invites from people just like you looking to make the move to Charlotte. So if that's you, if you're moving to Charlotte or the upstate of South Carolina, drop into the description below. All of our contact information is there whether you're moving in nine days or 90 days across the country, across the world, or maybe just across town. We're here to make your move everything you want it to be. So mortgage rates are one thing. Let's talk about home prices. What in the world is going on? I have gotten many people reaching out to me, those that have watched my videos, thank all of you. And I've said, what is going on in the market? I keep seeing all these luxury homes dropping their prices over and over and over and just sitting on market. Well, there's a few different reasons for that and a lot of key caveats. But the biggest thing, people are still overpricing their homes. That's really what it comes down to. They're pricing for a market that we're not in. See, buyers actually make the market. What someone is willing to pay is what the value is. As much as we don't wanna hear it, sellers, I know that is the way that it works. So when you're overpricing your property, you're actually doing yourself a disservice. In fact, I've had two clients recently, all who found me on YouTube actually, that we have gotten 150K off the ask price, 125K off the ask price. This means sellers are willing to take less. They're not willing to list for less. It's just a mindset thing. So keep that in mind. So what's going on with pricing? Pricing has cooled, but it hasn't collapsed, nor will we see a collapse. We have seen a 2% increase in the Charlotte market year over year between 2024, 2025. And the coolest thing is, no matter how bad the market has gotten, Charlotte has pretty much seen an increase every single year, even if it's just a little bit. Now, 2% is a far cry from the 20% that we saw in 2021, but it is still an increase. Now, you might see houses that are selling for less than they're listed for, but when we're looking at the average prices that things are selling for, it is still increasing. So there might be pricing and how we're reducing it, but it's still selling for more overall year over year. Now, the good thing is annually, we are seeing a potential appreciation of three to 5% in the Charlotte region that includes the upstate of South Carolina over the next year into the end of 2026. What this means is we're seeing a stabilization. We've seen a slowing of the dip, and now we're gonna start to seeing it rise again, which is really exciting. What we do wanna make sure of though, is that we keep that in a nice contained amount. We don't wanna see 20% increases or fluctuations in our pricing in a single year. That's what's gonna cause the market to stall again. So seeing that 5% increase in sales price is actually a good thing, and it's pretty stable. Translation, in layman's terms, we're headed into a normal market. I know, we haven't experienced that in a minute, have we? We're headed into normal market with actual inventory available, reasonable pricing, and actual ability to have negotiations again. So keep in mind, prices are still moving up, just not at the breakneck speed of 2020 to 2022. So keep that in mind. Honestly, for me, I am pretty excited for my clients being in this market. Both the seller side and the buyer side, as well as investors, all have a little bit of stake and all have a little bit of ability to not only wiggle, but also negotiate, which means we're going to come to the best possible terms versus what many of you experienced, although there were low rates in the 2020s, early 2020s, where you just had to put as much as you possibly could down and pray that you got the house. Having conversations is much better. So the next thing we want to look at when it has to do with the market is inventory and sales. What's selling and what's not? Now, over the last couple of years, we've seen a decrease in inventory. There's a lot of reasons for this, but the basic one, interest rates. They call it the lock-in effect. And basically what that means is sellers or those who own their homes right now that have a really low interest rate do not want to give it up. And in a lot of cases, if they did, they might actually be paying more for a smaller house on a monthly basis, which just doesn't make sense. Even with that, supplies and sales are expected to increase modestly. Fannie Mae expects about a 10% increase in availability of homes. Now, what this means is it's going to hit about 4.4 million in home sales nationwide. NAR, or the National Association of Realtors, is also pretty optimistic, showing a potential for 13% increase in existing home sales as well as an 8% increase in new home sales. Combined, that's gonna be a really promising 2026. Now, when it comes to new construction, you're going to see a ramping up of new construction coming to market to get prepared to meet the upcoming demand. That's right, they're seeing it in the future as well, and that's why you're seeing so many new developments coming online. Now, on the complete flip side, you're gonna see multifamily dwellings actually starting to slow down because the need for rentals is going to reduce slightly as the demand for homes starts to increase. Here's the great news. If you've been frustrated by the inventory available on the market, 2026 is gonna be a whole different ballgame. So if you've been looking for that perfect house, get ready because 2026 will probably have the house you were looking for. Now, there's a few different market drivers outside of, of course, the market, which would be our interest rates and sales prices, as well as inventory, and that comes down a little bit to demographics. Millennials like myself and Gen Z, which are coming up into the home buying availability for the pool of potential buyers on the market are certainly fueling demand. Meanwhile, boomers are starting to downsize and some are actually looking to go into rentals so they don't have any overhead maintenance, which is certainly pivoting what we're seeing in the market and actually helping add the inventory. Now, as of right now, affordability is still a challenge, but we are gonna see that shifting a bit in 2026 as we see interest rates decreasing. In addition, the more inventory we have, usually the more competitive the pricing become. And I mean that more to the attribute of a buyer. So if you're looking to purchase a home, you could find some pretty good deals with more inventory hitting the market. Now, while other areas of the country are seeing a bit of a different market, whereby there are further and further reductions in overall value of homes, Charlotte is seeing a completely different view. With over 115 net people moving here, meaning taking out the people moving out and keeping who's here, we're getting about 115 people a day, which keeps the demand high, keeps inventory steady. And once we get those drops in interest rate, we're going to see a bit of a boom here in the Charlotte area and possibly an even bigger price increase, in my opinion, than just 2%. So what does all this mean for investors? Well, if you're looking to invest in the Charlotte market in 2026, there's a few things you need to be made aware of. One thing all experts can count on and all agree on is that there is no housing market crash coming. I will repeat again, there's no housing market crash. So if you've been sitting on the sidelines hoping for those 08 markets, when you had hundreds of thousands of houses hitting the market that had nothing wrong with them, but were selling for 50K less than the neighbor, it's just not going to happen, I'm sorry. Another thing you're going to notice coming up is probably going to be some tighter lending standards. And this again is going to help keep the market stable. The more loosey-goosey lending standards are, the more room for potential mistakes, and that can lead to some issues in the market. And that can lead to issues in the market and market stability. Now, the least advisable would be flipping homes unless you can get a really, really good deal and you know your numbers. Biggest reason for this is because houses that are on the market right now, even if they are in perfect condition, you could still potentially be selling it at a loss after making those improvements. So where should you be putting your money in 2026? Hold the property. That's right. Purchase to hold and rent out long-term. Long-term, mid-term, and short-term rentals are the way to go. All of them will have significant and consistent cashflow, but be leery of the mid-term and short-term rentals as that market has become a bit more saturated in the Charlotte area, and you need to pick just the right spot if you're gonna be making the money back that you're hoping to. In addition to that, some people overlook the overhead costs of the short-term and mid-term rentals, which has to do with turnover, as well as having people available to go make those quick corrections. Long-term rental is probably gonna be your best way to go. Now, even though rates are a little bit higher, what we're seeing right now is you're gonna have to put at least 40% down in order to cashflow. Here's my suggestion, and what some analysts have shown over the last few months, that in 2026, rates will drop. It might be better to get in and get a good deal now and refinance once those interest rate drops, but keep that rent higher. So in summary, it probably would be a good idea if you're looking to invest in the Charlotte market to start scouting now, so you can make your move before things really start to heat up mid to late 2026. So will 2026 finally be the year that things feel normal again? Yes, it is gonna be that year, with an increase in inventory, a decrease in interest rates, and a stable, steady flow of buyers and sellers hitting the market. We have already hit our plateau in 2025. Stabilization is here, and a normal market is on the horizon with some great opportunities, not only to get your home sold, but certainly to buy the home that you've been waiting for. If you got value out of this video, be sure to hit that subscribe button and be up to date on everything Charlotte, North Carolina and the South Carolina upstate. I'm Kayla Lindsay, your Charlotte, North Carolina real estate expert. And as I mentioned, every day we get calls, texts, and emails, even Zoom invites from individuals just like you. We're thinking about making the move to the Charlotte, North Carolina area. So if that's you, be sure to go ahead and drop into the description below. All of our contact information is there, whether you're making the move in nine days or 90 days across the world, across the country, or simply across town. We're here to make your move everything you want it to be. Until next time, I look forward to showing you around town. You're making the move. There's a lot of videos that you can be watching like this one right here, or maybe even this one, really either one of these, but honestly, watch both of them because they're gonna help you make the move. Go ahead, pick one. They're both really good.