While reporting on mortgage rates and the housing market in general, I often find data from real estate technology company Zillow to be useful.
Specifically, Zillow Research regularly publishes reports and case studies that provide important information for home buyers and sellers.
One such report indicates that Zillow expects the housing market to move toward a more balanced, sustainable pace in 2026.
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Buyers may finally get a little more room to maneuver, while sellers should appreciate steadier prices and more reliable demand, Zillow Research reported.
After a year that offered buyers a handful of encouraging signs — from small improvements in affordability to more favorable conditions in nearly 20 major metros — both buyers and sellers can anticipate a gentle uptick in home prices, a slight increase in sales activity, and mortgage rates that remain above 6%, according to Zillow.
The fixed rate mortgage (FRM) average in the U.S. was 6.10% on Jan. 29 for a 30-year loan, according to the Federal Reserve Bank of St. Louis.
“The 30-year fixed-rate mortgage averaged 6.10% as of January 29, 2026, up slightly from last week when it averaged 6.09%. A year ago at this time, the 30-year FRM averaged 6.95%,” reported Freddie Mac.
“The 15-year fixed-rate mortgage averaged 5.49%, up from last week when it averaged 5.44%. A year ago at this time, the 15-year FRM averaged 6.12%,” Freddie Mac added.
Aside from mortgage rates, Zillow has now announced that the most buyer-friendly housing market of 2026 is the Indianapolis metro area.
“Home shoppers looking for an advantage will find it in Zillow’s newly released list of the most buyer-friendly housing markets of 2026,” Zillow wrote.
“Indianapolis, Atlanta and Charlotte top the list of metros where buyers will find room to negotiate for relatively budget-friendly homes that have a combination of cooling prices now with expected appreciation ahead.”
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Zillow lists top 10 housing markets to buy a home in 2026
- Indianapolis
- Atlanta
- Charlotte
- Jacksonville
- Oklahoma City
- Memphis
- Detroit
- Miami
- Tampa
- Pittsburgh
(Source:Zillow)
Zillow identifies most favorable housing market conditions
Indianapolis stands out for blending strong affordability compared with local wages, solid potential for home value growth, and relatively light buyer competition, based on Zillow’s Market Heat Index.
Many of Zillow’s most buyer‑friendly markets are clustered in the Midwest and the Sun Belt. In much of the Midwest, home prices didn’t surge as dramatically during the pandemic, which has helped preserve affordability.
Meanwhile, rapid building activity across the Sun Belt has boosted available inventory and reduced the level of competition buyers face.
“In 5 of the 10 markets, a median household can afford a typical home — meaning a mortgage costs below 30% of income, assuming a 20% down payment,” wrote Zillow senior economist Orphe Divounguy.
“Buyers will still have to make tradeoffs to find a home in their budget that fits their needs, but with more inventory, more time and more latitude to negotiate on price, they will have more control over that process,” Divounguy continued.
The U.S. government agrees with Zillow on defining what it takes to call a home affordable.
“Affordable housing is generally defined as housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities,” wrote the Department of Housing and Urban Development.
Zillow explores home values, income needed in top 10 metros
- Indianapolis: Typical home values sit at $283,040, with prices rising 0.2% in December. Values are expected to grow 2.9% over the next year, and buyers need 26.9% of the median income for a mortgage. (Source:Zillow)
- Atlanta: Homes average $374,117, slipping 0.1% in December. Annual growth is forecast at 1.9%, and mortgage payments require 30.5% of the median income. (Source:Zillow)
- Charlotte: The typical home value is $379,228, with no monthly change in December. Prices are projected to rise 2.6% in the coming year, and buyers spend 31.3% of median income on a mortgage. (Source:Zillow)
- Jacksonville: Home values average $342,853, holding steady with 0.0% monthly change. Annual appreciation is expected at 1.5%, and mortgage costs take 32.2% of median income. (Source:Zillow)
- Oklahoma City: Typical homes are valued at $238,791, increasing 0.2% in December. Forecasted annual growth is 2.2%, with mortgage payments using 26.8% of median income.
- Memphis: Home values sit at $237,882, up 0.2% for the month. Prices are expected to rise 1.5% over the next year, and mortgage payments require 27.5% of median income. (Source:Zillow)
- Detroit: The typical home value is $254,355, rising 0.4% in December. Annual growth is projected at 2.5%, and buyers need 25.9% of median income for a mortgage. (Source:Zillow)
- Miami: Homes average $466,837, dipping 0.1% in December. Values are expected to grow 2.5% annually, though mortgage payments consume a high 46.7% of median income. (Source:Zillow)
- Tampa: Typical home values are $351,532, down 0.1% for the month. Annual appreciation is forecast at 1.5%, with mortgage payments taking 35.2% of median income. (Source:Zillow)
- Pittsburgh: Homes are valued at $217,499, rising 0.1% in December. Prices are expected to grow 0.6% over the next year, and mortgage payments require 22.2% of median income. (Source:Zillow)
Related: Redfin predicts what’s next for mortgage rates, housing market
