Wondering what to expect from the housing market in 2026? You're not alone. For the past few years, affordability has been the biggest obstacle between buyers, sellers, and their next move. High mortgage rates, limited inventory, and rapid price growth forced many households across Central Oregon to sit on the sidelines.

The good news is this: conditions are finally shifting. In 2025, affordability improved to its best level in three years, and most economists agree that progress should continue into 2026. That outlook is based on three fundamentals that matter everywhere—including Bend, Redmond, Sisters, and La Pine: mortgage rates, inventory, and home prices.

Mortgage Rates: Lower Than Last Year, Likely the New Normal

Mortgage rates have already come down from their peak, dropping close to a full percentage point over the past year. That may not sound dramatic, but in real dollars it matters—especially in higher-priced Central Oregon markets.

Most forecasts suggest rates will hover in the low 6% range throughout 2026. Whether they move meaningfully lower will depend on inflation, employment, and Federal Reserve policy. But the key takeaway is this: today's rates are lower than they were a year ago, and that has already improved buying power.

Central Oregon impact:

• Buyers are regaining the ability to qualify, particularly in Bend and Sisters where prices remain well above national averages.

• Sellers should assume rates in the 6s are here to stay. Waiting for a return to 3–4% is unrealistic.

Bottom line: If you're planning a 2026 move in Central Oregon, current rates are workable—especially when paired with strong equity positions many long-time owners still hold.

Inventory Is Growing — Slowly, But Meaningfully

Nationally, housing inventory rose about 15% in 2025, restoring choice and negotiating leverage buyers hadn't had in years. Realtor.com projects another nearly 9% increase in 2026.

Central Oregon is following that same direction, though at a more measured pace. New listings have increased compared to the ultra-tight conditions of 2021–2023, particularly in Redmond and La Pine, while Bend and Sisters remain relatively constrained due to land, development limits, and long-term demand.

What this means locally:

• Buyers have more options and more time to decide.

• Multiple-offer situations are less common, except for well-priced, high-quality homes.

• Sellers must price correctly from the start. Overpricing leads to longer market times and price reductions.

This inventory growth is a key reason price pressure has cooled, which directly improves affordability.

Home Prices: Still Rising, Just at a Healthier Pace

With more homes on the market, price growth has slowed. National experts expect prices to rise about 1.6% in 2026, far below the rapid gains of earlier years.

Central Oregon will vary by submarket:

• Bend and Sisters are likely to see modest appreciation or flat pricing, supported by lifestyle demand and limited supply.

• Redmond and outlying areas may see more price sensitivity, especially for entry-level and mid-range homes.

• Some neighborhoods may experience small declines, particularly where inventory builds faster than demand.

What's unlikely is a crash. Despite online chatter predicting sharp drops, the fundamentals don't support it. As Realtor.com notes, the market is moving toward balance—not collapse.

For buyers: Expect steadier pricing and fewer surprises.

For sellers: Slower appreciation doesn't erase equity; it simply restores a healthier market.

More Homes Are Expected to Sell in 2026

Improving affordability, growing inventory, and stable prices all point to higher transaction volume in 2026. That's true nationally and in Central Oregon, where many households have delayed moves for years.

As Zillow's Chief Economist Mischa Fisher puts it:

"Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand."

Locally, this translates into:

• More move-up and downsizing activity

• Increased relocation buyers returning to the market

• Fewer stalled listings sitting indefinitely

Bottom Line for Central Oregon

Affordability won't improve overnight. But with mortgage rates stabilizing, inventory gradually increasing, and price growth normalizing, 2026 is shaping up to be the most balanced market Central Oregon has seen in years.

This isn't a frenzy—and that's a good thing. It's a market with more predictability, more negotiating room, and more realistic expectations on both sides of the table.

For buyers and sellers alike, 2026 offers something we haven't had in a while: breathing room.