If you’re contemplating a significant life shift in 2026, consider this: buying a house mirrors the complexities of tying the knot. The preparation seems endless, costs often exceed expectations, and stress levels can surge, making one question the entire endeavor.

All of this culminates in a pivotal day—whether it’s closing on a house or saying “I do”—that flies by in the blink of an eye. Yet, this day marks not a conclusion but the start of a new chapter. Becoming a homeowner or a spouse introduces a blend of responsibilities, joys, and hurdles. While you’ve hit a significant milestone, it’s merely the first leg of a longer journey.

In the upcoming year, it’s crucial for future home buyers to look beyond the closing day to envisage their lives—and budgets—as homeowners. Current homeowners have their own set of factors to consider, and renters will face developments too. Here’s what you need to know as you approach 2026.

Mortgage rates remain fairly stable

Could 2026 witness mortgage rates dipping to 3%? Ideally, we hope not, as such a drop might indicate an economic crisis reminiscent of the Great Recession or the pandemic.

It’s more plausible that mortgage rates will hover around their current levels, unless economic conditions worsen, which could drive them lower. Presently, experts anticipate that mortgage rates will remain stable throughout 2026.

Government-sponsored enterprise Fannie Mae expects the average 30-year fixed rate to drift from 6.2% to 5.9% by the end of 2026. The Mortgage Bankers Association has an even more cautious take, anticipating the average holding at 6.4% all year.

TIPS FOR 2026: Prospective buyers and sellers shouldn’t hold out for a major mortgage rate drop. If you’re trying to buy and you find a home that works for you at current rates, go for it. Homeowners who hope to sell may need to decide which is more important: keeping their early 2020s mega-low mortgage rate or living in a home they genuinely love.

Home price growth slows, but other costs accelerate

For all the focus on mortgage rates’ effects on affordability, home prices remain a serious stumbling block. Prices rose astronomically in 2021 and then kept climbing. We’re finally seeing price growth slow, though the level of improvement really depends on where you live.

Looking at year-over-year price changes in September, real estate analytics firm Cotality observed double-digit percentage increases in smaller markets in Michigan, West Virginia and Ohio. At the other end of the spectrum, seven of the 10 markets that saw the largest year-over-year price decreases were in Florida.

Let’s talk about Florida for a minute, because it exemplifies a larger trend that worsens affordability. From 2020 to 2025, average escrow costs — how much homeowners must set aside for homeowners’ insurance and property taxes — went up 45% nationwide, according to Cotality data. Over the same period, Florida homeowners’ escrow costs rose 70%, the second highest in the nation.

That massive cost increase is likely one reason home prices are decreasing. Rising costs both deter new buyers and push homeowners to sell, simultaneously increasing the supply of available homes while putting a damper on demand. Higher homeownership costs lessen the impact of lower home prices.

TIPS FOR 2026: Buyers should look beyond home price when setting a homebuying budget. Check out the tax history frequently included in online home listings, and look into insurance costs in your desired neighborhood. Homeowners should pay attention to local property taxes and regularly shop around for homeowners insurance to be sure they’re still getting the best rate. Keeping on top of these costs can help prevent an unexpected escrow shortage.

Renting gets more reasonable

With the costs of homeownership mounting, it’s not surprising that renting is looking more desirable. Data from NerdWallet’s 2025 Home Buyer Report found that 52% of American renters prefer renting to all of the expenses and effort of homeownership — and 36% plan on renting forever.

What may be a bit surprising is that rental affordability is improving. As of September 2025 — the most recent numbers available — median rent prices have declined year over year for 26 straight months, according to data from Realtor.com.

“We expect rents to continue to decline modestly in 2026, falling roughly another one percent over the year,” Joel Lerner, senior economist at Realtor.com, shared in an email. He noted that vacancies have been rising, making it a friendlier market for renters.

Rental options are growing, too, as built-to-rent communities (BTR) spring up in suburbs across the Sun Belt. These developments look like standard subdivisions or planned communities, but the new construction homes aren’t for sale. They’re rentals.

BTR isn’t cheap; after all, you’re renting an entire house. On the other hand, that rent is going toward more than just the home — which is new or recent construction and generally fairly upscale. BTR communities offer the space and privacy of single-family homes without the maintenance. Other amenities like gyms, pools and coworking spaces are often included, too.

TIPS FOR 2026: Rental options and costs are going to vary depending on where you live. You’re not going to see BTR as much in places like the Northeast, where there are fewer wide open spaces. But whether you want flexibility, affordability or both, renting may look pretty good compared to buying. If you’re fretting about the lack of equity, take a deep breath: There are other ways to build wealth besides owning a home.

Home equity borrowing boom unlikely

And speaking of home equity: That major home price growth in the early 2020s may still be holding back buyers, but it gave homeowners a considerable boost.

As of the fourth quarter of 2025, the average American mortgage holder had $204,000 in “tappable” equity, according to numbers from real estate data firm ICE Mortgage Technology. “Tappable” means the amount the homeowner could borrow while retaining at least a 20% stake in the home, so the total equity homeowners are sitting atop is even higher.

This equity bonanza has had mortgage lenders anticipating major demand for home equity loans or lines of credit. (Cash-out refinancing has less appeal since it would raise most homeowners’ mortgage rates.) Credit bureau Experian went so far as to declare 2025 “The Year of the HELOC.”

But this hasn’t materialized yet, and it’s not especially likely to happen in 2026. Increases in home equity borrowing over the past few years have been modest relative to how much homeowners’ equity increased. And as home prices cool, equity can decrease: In the second quarter of 2025, homeowner equity declined 0.8%, according to Cotality.

Equity borrowing could slow in 2026, especially if homeowners are feeling insecure about their own finances or the U.S. economy. There are signs that equity borrowing may be indicating financial strain rather than homeowners flexing their wealth.

In 2024, 39% of borrowers cited debt consolidation as their main reason for applying for a home equity loan, according to the Mortgage Bankers Association. That was up from 25% in 2022. Those listing home renovation as their main reason went down to 46%, compared to 65% in 2022.

TIPS FOR 2026: Borrowing against your home equity is always risky, since your property is the collateral for the loan. If you can’t repay your second mortgage, you could face foreclosure. Also, you’re not doing anything wrong by “sitting on” your home equity. Having more equity means you’ll spend less paying off your mortgage when you sell the home. It can also allow you to hand down an asset rather than a mortgage if you’re hoping to establish generational wealth. That can help you feel more secure — and no matter what your plans are for 2026, a little extra security could go a long way.