U.S. Housing Market Outlook: Modest Price Increase Projected

Veros Real Estate Solutions, renowned for its expertise in risk management and collateral valuation, has released its second-quarter 2026 VeroFORECAST report. The report projects a modest 1.1% increase in U.S. home prices over the coming year. Utilizing data from over 300 major housing markets across the nation, the forecast provides a comprehensive analysis of economic, housing, and geographic factors that influence market trends.

Despite expectations of a downturn, the housing market remains stable, albeit with persistent challenges. While the frenetic demand from the pandemic era has waned, an equilibrium persists where neither buyers nor sellers have compelling incentives to alter market dynamics significantly. Rising geopolitical tensions briefly drove up oil prices, heightening inflationary fears that increased long-term interest rates. However, mortgage rates stayed below last year's levels, slightly improving housing demand compared to 2025. Yet, potential buyers remain cautious due to affordability constraints linked to economic inflation, which was 4.2% in May 2026.

The housing supply has improved, providing more options for buyers than during the acute inventory shortages experienced in 2021 and 2022. This has led to moderated price increases and a steady, but limited, flow of transactions. Many homeowners are reluctant to move away from favorable pandemic-era mortgage rates, while sellers hesitate to decrease asking prices, contributing to stagnant market conditions. In regional markets, areas in the Northeast and Midwest are outperforming due to affordability and stable economies, with strong markets like Manchester, NH, and Rochester, NY, expected to see appreciation rates of 3.6% to 4.2% next year.

Conversely, markets such as Cape Coral-Fort Myers, FL, and Austin-Round Rock, TX, are forecasted to experience price declines between -0.8% and -2.7%. Overall, the housing market is anticipated to continue on a path of limited growth until substantial affordability improvements are realized.