Predictions For The Year Ahead
We hope you're having a great holiday season. As we step into 2026, let's take a look at what happened over the past year in the Portland area's real estate market and what we think will be ahead.
2025: What were the key trends?
Lock-in effect of low interest rates was much higher than anticipated
Price resilience + stability despite softer demand
Homeowner tenure jump
Federal rate cuts not translating to mortgage rates as expected
2025 was the year that buyers gained leverage. While we were in a few bidding wars this year, homes spent an average of 15% more time on the market, giving buyers greater leverage on contract terms, repair negotiations, and even the willingness to walk away.
But, it was also a year of resilience in the market. Despite continued higher interest rates, softer demand, and longer time on market, prices remained largely stable.
One major prediction for 2025 was a large increase in inventory—but it didn’t happen. New homes to market were up 2.7% year-over-year, but this is still well below our historical average. We expected people to settle into the new 6–6.5% interest-rate environment, but that hasn’t happened. A combination of factors that include home prices and interest rates has led to people moving less often. The old rule of thumb was an average of seven years; today, that number is closer to twelve.
2026: What's ahead?
Here are the key predictions from Zillow and Redfin - we’ll share our thoughts below.
Modest home price growth (1-2%)
Mortgage rates will hold above 6%
Home sales will increase slightly (4% over 2025)
Weak new construction market
Home affordability will increase as wages outgrow home values
More sellers will end up renting out their home if they don't get the price they target
Climate migration will stay local
How do we think these broad national predictions translate to the Portland Metro?
We think these national predictions are largely aligned with what we’ll see locally: a flat market driven by steady interest rates and limited inventory. While we've seen rate cuts at the federal level and expect one in 2026, they haven't correlated to a drop in borrowing rates for buyers - inflation and economy concerns are keeping rates sticky above 6%. It’s possible that a new Federal Reserve Chair in 2026 could push for more aggressive rate cuts.
Home sales and home inventory haven't taken the pop most economists expected. We'd love to see more inventory, but we don't see a compelling reason to expect higher inventory in 2026.
The idea of many more sellers pulling homes to rent is interesting, but we don’t see it becoming a meaningful market driver. While we encourage it when it makes sense, we've found most clients, especially in the city of Portland, do not want to be landlords. And the people that do seriously consider this run numbers and make a decision before going to market. While we occasionally see this, it won't be a driver in the market. One thing that could be an interesting is buyers and sellers getting a little more creative with financing - we see some buyers in the market asking about assumable mortgages and subject-to financing.
Here's the broad advice we have for clients in 2026:
If you have a charming home on a quiet street in a good neighborhood, we’re still seeing very strong demand.
Have a well-thought-out go-to-market strategy. Let's dial in your home and go to market with the right price at the right time.
It remains a great time to be a buyer. Don't be afraid to get a little bossy and aggressive on homes that have spent time on market.