Residential real estate investors face a mixed landscape as 2026 unfolds, with Realtor.com's midyear forecast signaling both opportunity and caution. The online listing platform now expects U.S. home prices to rise just 1.2% for the year, a pace that falls short of the anticipated 3.4% inflation rate. This divergence provides a rare window for prospective buyers, as the typical monthly mortgage payment for a 2026 purchaser is projected to land 1.9% below last year's level—a larger improvement than the 1.3% drop forecast in December.
The improvement stems from steadier mortgage rate expectations and softer price growth, combined with stronger wage gains. Realtor.com held its mortgage rate forecast at 6.3% for the year, unchanged from December, after a mix of sticky inflation and a resilient labor market erased earlier rate relief. Inflation hit a three-year high of 4.2% in May, and the Federal Reserve's June statement, its first under Chair Kevin Warsh, reinforced its commitment to price stability. Markets now anticipate one to two rate hikes by year-end, reversing earlier expectations of cuts, though the 10-year Treasury yield has stayed within a 4% to 4.5% band, keeping mortgage rates broadly range-bound.
Existing-home sales are forecast to reach 4.10 million in 2026, a 1.0% annual gain but below Realtor.com's earlier projection of 4.13 million. Sales lagged year-ago levels across the first quarter before steadying in April and strengthening through May, leaving year-to-date volume just 0.2% ahead of 2025. “Buyers and sellers have shown a lot of staying power this year,” said Danielle Hale, chief economist at Realtor.com. “Sellers are meeting the market with more realistic asking prices, which is helping deals get done.”
For investors weighing buy-to-rent strategies, income expectations warrant caution. Realtor.com now expects rents to fall 1.2% nationally in 2026, continuing last year's decline, as multifamily construction adds supply. Vacancy rates hit 7.3% in the first quarter and are projected to finish the year near the long-run average of 7.2%. Whether that softness persists hinges on new supply keeping pace with demand; a slowdown in construction could stall or reverse the relief on the demand side. Advisors may want to monitor how these trends affect client portfolios, especially those with exposure to real estate through vehicles like Voya's managed accounts for 401(k) participants, which now include private equity, credit, and real estate.
Investors should also weigh a less visible risk flagged in the update: the expanding use of private, off-MLS listing networks. Realtor.com has yet to find clear evidence the trend is moving prices or sales volumes, but it may be distorting inventory figures as homes change hands before ever reaching a public listing. “Keeping listings off the open market changes the equation for everyone involved,” Hale said. “Sellers who go private are trading away visibility and competition among buyers, and that competition is usually what pushes a sale price up. For buyers, it means they aren't seeing every home or the whole market, making it harder to know what a fair price even looks like.”
On the supply side, builders are pulling back permits and starts most sharply in the South and West, the regions that typically account for most national construction and have largely closed earlier supply gaps. Realtor.com puts the national homebuilding shortfall at roughly 4 million homes, with the Northeast and Midwest still facing the tightest conditions, and potentially the clearest opening for investors chasing undersupplied markets. Homeownership ticked higher than expected in the first quarter, reaching 65.3%, prompting Realtor.com to raise its full-year outlook. Younger households continue to face affordability hurdles, with a record share of 18- to 34-year-olds still living at home, though those who do buy are increasingly choosing ownership over renting.
The broader economic backdrop adds another layer of complexity. Currency swings and global inflation are reshaping high-net-worth living costs, as highlighted in a recent Julius Baer report showing a 10.2% rise in HNW living costs driven by currency movements rather than local inflation. Meanwhile, an oil glut is pressuring inflation outlooks as stockpile rebuilds lag, adding to the uncertainty around future Fed policy and mortgage rates. For advisors, these crosscurrents underscore the need to stress-test real estate allocations against both inflation and rate scenarios.
