2025 Wrap-Up: The Real Estate Market Is Shifting—Here’s What to Expect in 2026

As we close out 2025, one theme has shaped nearly every real estate conversation this year: affordability. Whether you’re following national headlines or talking with neighbors here in Frederick County, the question on everyone’s mind has been the same—when will housing become more affordable again?

While we haven’t seen a dramatic overnight shift, a number of meaningful changes are underway that will shape how we buy and sell homes in 2026.

Mortgage Rates Are Easing—But Slowly

The Federal Reserve has made several quarter-point rate cuts over the last few meetings. These cuts have provided some relief, nudging mortgage rates downward from their highs. But they haven’t yet sparked the sharp drop many buyers were hoping for. Instead, we’ve entered a phase of gradual normalization, where rates are easing at a slow and steady pace.

Even still, this softening is already helping some buyers re-enter the market—especially those who had put plans on hold when rates hovered near 8%.

New Federal Proposals Aim to Address Affordability

Alongside the Fed’s actions, the federal government has floated several new ideas to help improve housing affordability. Two proposals in particular have generated a lot of discussion: the 50-year mortgage and the portable mortgage.

The 50-year mortgage was met with plenty of criticism—and for good reason. While it may lower the monthly payment slightly, the total interest paid over the life of the loan would skyrocket. For most homeowners, the long-term cost simply outweighs the short-term benefit.

The portable mortgage, however, is far more promising. Under this proposal, homeowners could “port” their existing mortgage—including the interest rate—to their next home. For anyone currently feeling locked into their property because of a low-rate loan, this could be a real game changer.

Think about downsizing, making a lateral move for a job, or even buying in the same price range. Right now, moving from a $300K home to another $300K home could mean a much higher monthly payment due to today’s rates. A portable mortgage would remove that penalty. While this concept is still in discussion stages, it’s gaining traction—and we’ll keep watching it closely.

What We Expect Heading Into 2026

Most economists anticipate that mortgage rates will continue trending downward through 2026, albeit gradually. The days of ultra-low pandemic-era rates aren’t expected to return, but rates in the mid-6% range are already giving many homeowners the confidence to make a move.

And that’s exactly what we’re seeing on the ground. Homeowners are prioritizing lifestyle over interest rates—choosing better locations, more space, land, and amenities even if it means giving up their lower mortgage. Many of our clients (including some of you reading this!) are already preparing to buy or sell early in the new year.