What the 2026 Real Estate Market Outlook Really Means for Buyers & Sellers in Bellingham, WA & Beyond

As we step into 2026, many of our clients, from first-time buyers to seasoned sellers right here in Bellingham, are asking the same question: What’s the housing market going to look like this year? Good news: the national forecast is shaping up to bring more opportunities, better balance, and meaningful movement in the housing market. After several years of high mortgage rates and tight inventory, experts are finally pointing to a healthier, more dynamic market in 2026 and that’s exciting for folks ready to make a move in Whatcom County or beyond.

In this comprehensive guide, we’ll break down the top trends predicted for 2026, from mortgage rates and home prices to inventory and affordability, all in an easy-to-understand format designed to help you confidently plan your next real estate move.

Mortgage Rates: Relief on the Horizon (But Slowly)

One of the biggest stories heading into 2026 is the outlook for mortgage rates. After peaking near 7% in recent years, rates have already begun to ease, and most forecasts suggest this trend will continue through the year.

But here’s the key: rates aren’t expected to plummet overnight. Instead, economists describe the trajectory as more like “taking the stairs down", meaning moderate improvements over time rather than dramatic drops.

What This Means for You

• Mortgage rates could dip into the low-6% range or even the high-5%s later in the year, a meaningful improvement from recent highs.
• Even a small reduction in rates can have a big impact on monthly payments and purchasing power, especially here in Bellingham where affordability is such a local concern.
• Buyers who may have been sidelined by higher financing costs could start to re-engage with confidence.
• For homebuyers, this gradual easing could translate into more manageable mortgage payments and a stronger case for entering the market sooner rather than later (especially before competition picks up). 

Home Prices: Growth, But at a More Sustainable Pace

Let’s talk home prices, the topic that affects everyone from sellers planning their next move to buyers trying to stretch every dollar.

While prices aren’t expected to tumble, forecast data points to modest, sustainable growth across most of the U.S. in 2026. Prices should still rise nationally, but at a gentle pace that brings markets closer to balance while maintaining long-term value for homeowners.

What Experts Are Saying

National forecasts anticipate home price increases that are noticeable but moderate, rather than dramatic spikes or declines.

Some regions, especially high-demand metro areas, may see stronger gains, while others edge toward stabilization.

For folks right here in the Greater Bellingham area, this generally means continued equity gains without the feverish price volatility of the last few years. That’s a win for sellers looking to maximize value and buyers who want long-term appreciation without overpaying.

Inventory: More Homes, More Choices

Inventory, or the number of homes for sale, has been a major talking point for years. Back in 2020-2021, supply was notoriously tight. Fast forward to today, and experts are forecasting continued inventory growth throughout 2026, marking the third straight year of increasing supply.

Why Inventory Growth Matters

• More homes on the market mean more options for buyers, whether you’re hunting for a cozy Craftsman in Fairhaven or a newer build in Sudden Valley.
• As supply expands, the market moves closer to what economists call a balanced market, typically around 4.6–6 months of inventory. That’s the sweet spot where neither buyers nor sellers dominate negotiations.
• Increased listings can help ease competition and bidding wars, especially in entry-level price ranges.
• However, it’s important to note that inventory still isn’t back to pre-pandemic norms, so while we’re headed in the right direction, buyers will still need a strategic approach to land the right home.

Sales Activity: More Movement in 2026

After a few years of muted sales activity driven largely by rate-related affordability challenges, forecasts suggest 2026 will bring more buyer and seller activity.

Experts believe that modestly lower rates and growing inventory will encourage more people to make a move, whether that’s buying their first home, upsizing to fit a growing family, or selling and relocating.

What This Means for Buyers & Sellers

Buyers: More listings and rate relief = better chances of finding your ideal home without extreme competition.

Sellers: More motivated buyers in the market could mean quicker sales and strong offers — especially if your property is priced right and marketed well.

Everyone: A healthier pace of sales signals a market that’s working the way it’s supposed to — not frozen, not overheated.

In short, 2026 is shaping up to be a year where movement returns to the housing market, something we’ve been eager to see.

Affordability: A Step in the Right Direction

With mortgage rates easing and wage growth outpacing home price increases in many areas, affordability conditions are expected to improve next year. According to national forecasts:

The typical monthly mortgage payment is projected to fall slightly year-over-year.

For the first time in several years, the payment share of median income could dip below 30%, a key threshold used by economists to define housing affordability.

That doesn’t mean affordability challenges will vanish, especially in competitive markets like the West Coast, but these shifts represent real progress compared to where we’ve been. For local buyers in Bellingham, that could mean more attainable homeownership opportunities that align with both budget and lifestyle.

Local Market Matters: Why Bellingham Will Still Be Unique

All of the national data and forecasts we’ve covered matter, but here’s the real key: real estate is local. Market conditions in Bellingham and Whatcom County can differ meaningfully from national averages. A few local factors we’re watching closely:

Strong Local Demand

Bellingham’s quality of life, proximity to the coast and mountains, and vibrant community continue to attract buyers from across the region, including folks relocating from Seattle, Portland, and beyond.

Unique Inventory Trends

While national inventory may be improving, local supply constraints still play a major role here. Well-priced homes, especially those in move-in condition, continue to generate interest quickly.

Buyer & Seller Expectations

Local preferences, such as interest in outdoor space, proximity to schools, or access to commuter routes, shape how properties perform here, sometimes differently than the broader U.S. market.

As your local real estate team, we keep a finger on the pulse of both the national trends and what’s specifically happening on the ground in Bellingham, giving you the edge when buying or selling. 

What This Means for You in 2026

To wrap up, here’s the big picture for the 2026 housing market:

Mortgage Rates

Slowly easing but remaining above historic lows, still offering relief compared to recent years.

Home Prices

Growth is expected to continue, but at a more reasonable pace that supports planning and strategic decision-making.

Inventory

More homes will hit the market, translating to greater choice and a more balanced playing field for buyers and sellers.

Sales Activity

Momentum should pick up, making 2026 a year where more people successfully achieve their real estate goals.

Affordability

Gradual improvement that makes homeownership more feasible for a broader group of buyers.

Let’s Make 2026 Your Year in Real Estate

Whether you’re dreaming of your first home in Birchwood, considering downsizing in Sudden Valley, or thinking about selling your cherished Bellingham property, 2026 brings fresh opportunities worth exploring.

We’d love to sit down with you and map out a strategy tailored to your goals and timeline. Reach out anytime. We’re here to help you navigate what’s ahead with confidence, insight, and a whole lot of local expertise.

Here’s to new beginnings, smart decisions, and thriving in the 2026 housing market!