How to prepare your finances to buy a house in 2026

Buying a house entails many major financial decisions. A house is not only a place you hope will become your sanctuary and a place to make lasting memories, it’s also a good investment when done right. But just as with stocks, timing the real estate market can be tough. This naturally results in asking yourself, “Should I buy a house now or wait until 2026?”

Before we dive deeper into the details, let’s see what experts are saying. Lawrence Yun, Chief Economist for the National Association of REALTORS® (NAR), sees stronger home sales and modest price growth in 2026. Similarly, Fannie Mae’s Q2 2025 Home Price Expectations Survey found a consensus of slightly slower growth than previously expected, but it was still positive. Here’s how that might answer some of your most burning questions:

• Will housing prices drop by 2026? Probably not. Fannie Mae’s panel of more than 100 housing experts expect home prices to rise by 2.9% in 2025 and 2.8% in 2026. That’s still positive, but slower growth than 2024’s 5.3% increase. NAR’s Yun forecasts 3% growth in 2025 and 4% in 2026.
• Should I wait to buy a home until 2026? With Yun expecting the number of existing home sales to rise 6% in 2025 and 11% in 2026, and new-home sales to increase 10% in 2025 and 5% in 2026, the market might be more active, but not cheaper. More buyers entering the market could mean more competition as well.
• Will my house be worth more in 5 years? Probably. Both forecasts see continued national price growth, and Yun expects mortgage rates to ease a little. He expects them to go from 6.4% in late 2025 to 6.1% in 2026. The combination of increased demand and improved affordability, due to lower interest rates, suggests that homes will continue to add value. And while there have been some years when homes lose value, since the early ’60s, homes have consistently increased in value.

Understanding the current housing market

For the past few years, the housing market has been one of high demand and limited supply. But the demand part might be sliding. For instance, according to Fortune, buyers are balking at higher prices and relatively high mortgage rates.

Home prices rose sharply during the pandemic, and in the post-pandemic years, interest rates rose as the Federal Reserve raised rates to battle inflation. Higher mortgage rates make a home more expensive by increasing monthly payments and usually reduce the number of buyers.

As of late August 2025, it’s unclear whether the Fed will lower rates soon or not. However, even if the Fed does lower rates in late 2025, it takes time for that change to filter down and affect mortgage rates. Plus, lower rates sometimes stimulate demand, which could raise prices. Fortunately, it’s easy to keep up on mortgage interest rates so you can make an informed decision.

Should I buy a house now or wait until 2026?

The real answer is you should buy a home when your finances, lifestyle, and the home of your dreams all align. You want to make sure you can afford a home comfortably and know how much you can spend on a home. This is especially true if you’re a first-time buyer. That said, it’s definitely a good idea to understand the market trends and realities.

One recent change that buyers should be aware of is in the way real estate agent commissions are paid. Traditionally, the seller paid the entire commission of both their and the buyer’s agent. Typically, that totaled 5% to 6%. Not anymore. Now, the buyer is responsible for paying their agent’s commission, typically 2.5% to 3% of the property’s sale price. This can be negotiated, but adds a substantial cost to your transaction.

Looking at the longer term, according to a Fannie Mae analysis, nearly 40% of U.S. homes – about 32 million – are owned by baby boomers. With that group hitting their 70s and 80s, 13 million to 15 million owners could be leaving their homes from 2026 to 2036. That’s a 42% increase from the previous decade.

One thing to factor in is that Gen Z – about 70 million strong – and Gen Alpha – numbering nearly 40 million – will enter prime home buying age. So, while supply might increase, demand might as well. However, experts remain unconvinced that demand will increase enough. In short, this could create a buyers market as supply overwhelms demand.

How to prepare your finances to buy in 2026

If you want to buy a home in 2026, there are actionable steps you can take starting today. If all of them aren’t in order right now, that’s okay, there’s time. The important thing is to understand the process and work toward completing it. If this is your first house, this will help you meet first-time buyer qualifications.

• Assess your income stability. Lenders want to know that you will be able to pay your mortgage. So, typically, they want to see at least two years of steady, reliable income.
• Evaluate your credit score and debt. Your credit score and level of debt greatly affect whether you’ll get approved for a mortgage and what interest rate you’ll pay. If your credit score or debt is not ideal, start working today to improve them.
• Save for a down payment. The larger your down payment the less money you’ll need to borrow. That can make qualification easier and mortgage payments smaller. It also helps you sidestep private mortgage insurance (PMI), another potential cost you should try to avoid. Down payment and mortgage calculators can help you plan and save.
• Plan for total ownership costs. Remember that your mortgage payment is not the only cost that comes with homeownership. There are property taxes, maintenance costs, homeowners association fees (if applicable), homeowners insurance, and potentially more. This guide on first-time buyer expenses can help plan for them.
• Build an emergency fund. A faulty water heater, an unexpected car repair, a surprise medical bill. Life has a way of throwing us curves. To avoid them threatening your sleep, or your mortgage payment, try to save 3 – 6 months’ worth of living expenses.
• Understand preapproval vs. prequalification. Most lenders use these terms to mean the same thing, so don’t worry about the distinction too much. The important thing to know is getting preapproved can make you more attractive to sellers. They’ll know that you can afford their home. It can also give you a good idea of how much house you can afford and what your mortgage payments might be.
• Explore bridge loans if needed. If you want to buy your new home before selling your current one, you might not have the funds for the down payment and closing costs. For this, there is something called a bridge loan. The proceeds of the loan “bridge” the time between buying and selling. Once you sell your existing home, you pay off the bridge loan with the proceeds.

Pros and cons of waiting until 2026

As with most things in life, there are advantages and drawbacks to waiting until 2026 to buy a home. Of course, the “right time” to buy a house depends on personal circumstances. But if you’re thinking of waiting until next year, here are some pros and cons.

Benefits of buying now

• Capitalizing on current local market opportunities. If you find your dream house in a sluggish market with motivated sellers, it could be a great buying opportunity.
• Potential for property appreciation. Every month you own instead of rent is a month you potentially build equity.
• Potential economic advantages. Buying now might benefit you indirectly, such as with tax benefits or shorter commute times. Waiting could cost you.
• Not “over thinking” the market. Housing is inherently unpredictable, and markets are difficult to time. If you’re financially ready to buy now, waiting for the so-called perfect time could backfire.

Benefits of waiting

• Demographic supply tailwind. As boomers exit the real estate market, 13 million to 15 million homes are expected to hit the market in the next decade. That could set up a buyer’s market.
• Potential near-term softening. While some experts see a slight increase in housing prices through 2026, others predict a softening in prices. It’s a gamble, but waiting could pay off in lower prices.
• Stronger personal readiness. If your financial picture, credit, or debt are not where you need them to be, waiting until 2026 gives you time to improve them. It also allows you time to research neighborhoods and other attributes you want in a home.
• More deliberate decision-making. Buying a home is probably one of the biggest financial moves you’ll make, so giving yourself the time to analyze the market to ensure it fits your budget and needs is always a smart move.

The quick comparison

The bottom line: Prepare confidently for your 2026 home purchase

No one has a crystal ball for predicting the housing market. With some experts expecting flat prices and others calling for slightly rising prices, it’s impossible to know exactly what they’ll do in your area.

The best move you can make is to consult a real estate agent in your area to help you understand your local market and make informed decisions. With their advice, you can make a solid plan with a timeline that optimizes your homebuying experience.

Take command of the things you can control and move forward with actions that allow you to buy when it’s best for your lifestyle and life goals. A great start is to start the preapproval process through Rocket Mortgage to discover how much house you can afford.