After four years of pandemic-driven extremes, including frozen migration, volatile mortgage rates, and affordability challenges, the U.S. housing market is entering a new era. For anyone planning a move in Lamorinda or the greater East Bay, the outlook for 2026 brings encouraging signs.
According to Compass's Housing Market Outlook, here are the four key signals to watch:
Inventory Growth: Nationally, buyers can expect 10% more homes coming to market, creating greater selection and improved negotiating power. In Lamorinda, this could mean more opportunities for buyers seeking properties with specific features, such as modern finishes, level lots, or prime locations.
Price Stability: Home prices are projected to rise modestly by just 0.5%, while incomes grow faster, a combination that should improve affordability. Locally, Lamorinda saw relatively flat price appreciation in 2025, with the median at $1,915,000 and $823/sq.ft. compared to $1,950,000 and $825/sq.ft. in 2024, according to Compass Chief Market Analyst for the San Francisco Bay Area, Patrick Carlisle.
Mortgage Rate Relief: Rates are expected to range from 5.9% to 6.9%, averaging around 6.4% for the year, creating a more favorable financing environment for buyers. For a $2M home with 20% down, the difference between a 7% and 6.4% mortgage represents approximately $400/month in savings, meaningful relief for buyers who've been waiting on the sidelines.
Sales Momentum: Home sales could reach 4.25 million nationwide, a 5% increase from 2025, as lower rates and growing inventory draw buyers back into the market.
The Bottom Line: After years of dramatic market swings, we're moving toward more balanced, predictable conditions. Whether you're considering selling to take advantage of improving buyer activity or are ready to explore the growing inventory as a buyer, let's discuss how these trends specifically impact your timeline and goals.
We are busy gearing up for the new year. Please don't hesitate to reach out to us now if real estate is on your 2026 agenda.