What to Expect from LA's Housing Market in 2026

After years of volatility, experts are forecasting a calmer, more balanced housing market for 2026. The big question for LA buyers and sellers: what does that actually mean for your plans this year?

The consensus from major forecasters paints a picture of modest improvements across the board. Rates should ease slightly, inventory will continue rising, and home sales are expected to climb as affordability gradually improves. Here's what you need to know.

Mortgage rates will stay above 6%

If you've been waiting for a dramatic drop in mortgage rates, CNBC reports that experts predict 30-year fixed rates will average between 5.90% and 6.30% in 2026. That's lower than 2025's average of 6.6%, but nowhere near the pandemic era lows.

Most of the top forecasters see rates staying above 6% throughout the year. Here's a snapshot of projections:

2026 Mortgage Rate Forecasts:

• Capital Economics: 6.5%

• MBA: 6.4%

• Compass: 6.4%

• Realtor.com: 6.3%

• Redfin: 6.3%

• Fannie Mae: 6.0%

Home prices will grow modestly

Price forecasts vary widely depending on local supply and demand. Yahoo Finance notes that most forecasters project home prices to increase between 0.5% and 2.0% in 2026. Some outliers predict as high as 4%, while others see a slight dip.

This is important context to share with clients who might be expecting dramatic appreciation or waiting for a crash. The market will be relatively stable.

Home Price Growth Projections:

• Cotality: +4.3%

• NAR: +4.0%

• Wells Fargo: +3.5%

• Realtor.com: +2.2%

• Zillow: +1.2%

• MBA: -0.3%

Housing inventory will continue to rise

Good news for buyers: most analysts agree housing inventory will keep growing in 2026, building on 2025's trend. The rate locked phenomenon is slowly losing its grip as more homeowners are forced or willing to move despite higher rates.

Compass predicts a 10% to 15% increase in inventory, with BrightMLS forecasting 10.9% and Realtor.com projecting 8.9%. This is one of the most significant shifts that will impact LA's market dynamics in 2026.

More options mean less competition and more negotiating power for buyers who have been waiting on the sidelines.

The luxury market operates differently

The luxury sector and the broader market are essentially two separate worlds. Cash transactions make up at least half of all luxury sales, meaning mortgage rates have far less impact. In LA, where million dollar homes are entry level in many desirable neighborhoods, this segment will continue driving overall market activity regardless of rate fluctuations.

Investors will stay active

Recent survey data shows 68% of single family rental investors plan to buy at least one more property in 2026. They're not pulling back, they're just being more selective about where and what they buy.

While many are selling underperforming assets and managing rising insurance costs, their interest in acquiring remains strong. Agents who can present well priced opportunities with clear cash flow narratives will continue finding investor clients throughout 2026.

What this means for LA

LA's market will mirror these national trends but with local nuances. The city's chronic inventory shortage means even modest increases in supply will be felt more dramatically here. Areas that were inaccessible to many buyers in 2023 and 2024 may open up slightly as competition eases.

Expect the split between LA proper and outlying areas to continue. Well located, turnkey properties in desirable neighborhoods will still command premium pricing and multiple offers. But homes that need work or sit in less competitive areas will give buyers real negotiating leverage.

For sellers, pricing strategy becomes critical. The days of listing high and waiting for the market to come to you are over in most segments. Homes priced realistically will sell. Overpriced listings will sit, and sitting too long now carries real consequences in a market with growing inventory.

My take

For buyers: This is the most favorable environment we've seen in years. More inventory, slightly lower rates, and less competition mean you'll have actual choices again. Get pre approved now and be ready to act when you find the right property.

For sellers: You can still get a great price, but it requires realistic expectations and smart positioning. Work with an agent who understands current market dynamics and can price your home to generate activity in the first two weeks.

For everyone: 2026 won't be dramatic, but it will be different. The market is normalizing after years of extremes. That's actually good news for people who want to make a move based on life circumstances rather than trying to time the market perfectly.

Ready to Make Your Move?

Whether you're buying or selling in 2026, having a clear strategy matters more than ever. Let's talk about how these market trends specifically impact your situation and timeline.

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Jeremiah Vancans

Real Estate Agent
Vancans Group | Compass

jeremiah@vancansgroup.com
vancansgroup.com

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