What the 2026 Housing Market Means for Buyers and Sellers
Every year around this time, I take a deep dive into the national housing forecasts and compare them to what we’re experiencing firsthand with our buyers and sellers here in Downers Grove and across DuPage County. Between our day-to-day work listening to clients, understanding their hesitations, and navigating real scenarios, paired with the latest data from Realtor.com and other trusted sources the picture for 2026 becomes clear. The market is stabilizing, not surging, and for most people preparing to buy or sell, that’s a very good thing.
On the local level, our projections for 2026 show home sales declining by roughly 2.6%, while home prices are expected to rise around 4.4%. This combination of fewer transactions but continued price growth tells a clear story. Demand is still here, pricing power remains strong for well-presented homes, and the buyers who are active are serious and financially prepared.
Layering the national trends on top of our local realities gives us the clearest picture of what to expect in the year ahead.
Mortgage Rates Are Expected to Stabilize
Nationally, Realtor.com expects mortgage rates to average about 6.3% in 2026, which is meaningful after the volatility buyers faced through 2024 and early 2025. Rate stability is already bringing confidence back to our local buyers, especially move-up buyers who have been waiting for predictability.
Even with many homeowners locked into sub-4% mortgages, the “lock-in effect” is starting to soften. Life events are beginning to drive movement again, downsizing, relocations, expanding families, and the desire to be in a walkable suburban community like Downers Grove.
Local Market: Prices Rising, Sales Slipping
Here in Downers Grove and much of DuPage County, our local projection of a 2.6% decline in home sales reflects the reality that many homeowners still prefer to hold onto their low-rate mortgages. Even so, the expected 4.4% increase in home prices shows that demand remains strong for the right properties. This isn’t a boom market and it’s no longer the runaway seller’s market of 2021–2022. It’s a selective market. The homes that succeed are the ones:
-
Priced correctly
-
Professionally marketed
-
Prepared before listing
-
Positioned well against rising inventory
And buyers, who now have more room to negotiate, are paying close attention to value.
National Inventory Trends Are Starting to Influence Local Supply
Realtor.com expects an 8.9% increase in for-sale inventory nationally in 2026. While our local inventory levels remain tighter than the national average, the upward trend is beginning to show.
In Downers Grove, we’re seeing modest improvement in:
-
Move-up homes in the $450k–$750k range
-
Townhomes and condos
-
Select new-construction options in nearby suburbs including Downers Grove with many new homes being completed in the Talon Reserve by MI Homes community on the far northeast side of town.
But inventory remains especially tight for:
-
Homes walkable to Downtown Downers Grove
-
Ranch homes
-
Updated homes under $450k
-
Luxury listings in top school areas
So even with more for-sale options nationwide, buyers locally are in need guidance and strategy.
Affordability Quietly Improves
Even though home prices are expected to rise locally, national affordability is improving slowly because:
-
Mortgage rates are stabilizing
-
Wage growth is outpacing inflation
-
Real (inflation-adjusted) home prices are dipping (at least nationally)
-
Monthly payments nationally are projected to fall slightly
This mostly aligns with what we’re seeing in DuPage County: more first-time buyers re-entering the market, especially after rents have begun softening.
National Rent Softening Boosts Buyer Mobility
Realtor.com expects rents nationwide to continue easing in 2026 thanks to years of strong multifamily construction. When rents stop climbing, renters have room to consider buying again, or to relocate without being priced out.
Locally, that shows up as:
-
More condo buyers near Metra stations
-
Increased interest in smaller townhomes
-
Younger buyers re-entering the search after pausing in 2023–2024
Rent softening creates movement and movement fuels our local market.
Builders Will Play a Larger Role in 2026
Nationally, builders faced a year of higher material costs and cooling demand in 2025. As a result, they began offering more incentives, including rate buydowns and closing credits.
In 2026, builders are expected to:
-
Maintain strong inventory
-
Offer competitive pricing
-
Lean into smaller, more affordable designs
-
Continue expanding townhome and rowhome options
While the Midwest isn’t building at the same pace as the South or West, buyers in areas like Lisle, Lombard, Glen Ellyn, and southwest Naperville will still see more attainable new-construction options emerging. But in highly desirable, land-locked downtown areas, such as the core of Downers Grove, limited available land drives construction costs higher. When builders can only justify premium lots with premium products, it naturally results in larger luxury homes and record-high pricing for those neighborhoods.
The Broader Economy: Jobs, Inflation, and Fed Strategy
The national housing outlook hinges on several key economic themes:
Inflation
It eased early in 2025, rose again due to tariffs, and is expected to settle around 3% in 2026.
Wage Growth
Projected to remain just ahead of inflation, giving households slight but real gains in purchasing power.
Labor Market
Hiring has slowed as companies adapt to AI-driven efficiencies. This may affect some buyers but hasn’t meaningfully impacted DuPage County’s demand, thanks to our stable mix of professions and family-driven buyers.
Federal Reserve Transition
Jerome Powell’s term ends in May 2026, introducing an element of uncertainty. The expectation is that the Fed will maintain a careful, middle-ground approach.
What Buyers Should Expect in 2026
2026 will reward the buyers who prepare early and move thoughtfully.
Your advantages:
-
More inventory than we’ve seen in years
-
Stable mortgage rates
-
Softer rents
-
Slightly better affordability
-
Improved negotiating power
Buyers looking for townhomes, updated condos, or smaller single-family homes in Downers Grove, Lisle, Woodridge, or Lombard will see meaningful opportunities.
What Sellers Should Expect in 2026
For sellers, this is still a strong market, but not automatic.
The homes that succeed in 2026 will be:
-
Priced strategically
-
Professionally presented
-
Highly visible online
-
Responsive to early feedback
With local prices projected to climb 4.4%, sellers who prepare properly can still achieve excellent results, even as sales volumes dip.
Investors & Mobility Trends
Investors continue to make up a bit more than 10% of national buyers. Locally, interest remains strong in:
-
Multi-unit buildings
-
Long-term rentals near transit
-
Fix-and-update opportunities
Meanwhile, renters experiencing more flexibility with pricing are more open to relocating, and often considering purchasing instead of renewing leases.
What This All Means for Downers Grove
The national outlook gives us a roadmap. The local data shows that Downers Grove remains incredibly resilient and competitive. For buyers, 2026 offers opportunity. For sellers, it offers strength, if handled correctly. For everyone, it’s a year that rewards clear strategy over guesswork. If you’re thinking about your next move, I’m always happy to walk through what these trends mean for your home, your neighborhood, and your goals.
