What 2026 could mean for Seattle's real estate market
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For 2026, expect lower mortgage rates but a still-tough housing market.
Why it matters: Homes remain unaffordable for many, especially younger people.
- Here's what industry economists predict.
Rates to stay above 6%
U.S. mortgage rates are expected to hover near 6.3% in 2026, according to Realtor.com chief economist Danielle Hale.
- Redfin also projects 30-year fixed rates will average 6.3%, dipping from 6.6% in 2025 while staying well above pandemic-era levels.
What we're hearing: "A lot of the challenges that the housing market has been grappling with — the lack of affordability and the 'lock-in effect' on existing homeowners — are still going to be present in 2026, but the grip is kind of loosening," Hale tells Axios.
Case in point: The typical monthly mortgage in the Seattle area in November was about $3,600 — down $260 from a year earlier, Zillow senior economist Orphe Divounguy told Axios.
- That reflects lower mortgage rates as well as slightly higher inventory, trends he said will likely continue in 2026.
More roommates, fewer babies
High housing costs may be reshaping U.S. households.
- Think: More adult children living with their parents (and vice versa), smaller families and more friends buying homes together, "often with prenup-style agreements," according to Redfin researchers.
Between the lines: "Entry-level inventory remains tight, limiting options for first-time buyers," says Selma Hepp, chief economist at Cotality, an industry data provider.
What we're watching: "Renovations that create space for multiple generations are becoming increasingly common" — from garage conversions to separate suites for adult kids or aging parents — as "families rethink the homes they already have," Redfin chief economist Daryl Fairweather tells Axios.
Tale of two markets persists
A regional divide in the housing market isn't going away.
Catch up quick: Home prices are rising faster in the Northeast and Midwest, where there's less newly built housing.
Zoom in: Locally, the Seattle metro area housing market is expected to "remain somewhat soft" and "somewhat in favor of homebuyers" this year, Divounguy of Zillow told Axios.
What's next: Seattle-area home values are likely to remain relatively flat in 2026, Divounguy said, providing some relief after years of pandemic-era increases.