Over the last couple of years, almost everyone has felt the impact of higher interest rates — especially anyone thinking about buying or selling a home. Mortgage rates climbed fast, monthly payments increased, and many families hit the pause button on moving.

But recently, we’ve started to see something important happen: interest rates have begun moving back down. That shift may sound small, but it can have a big ripple effect on the housing market — especially here in the Midwest.

Why interest rates matter so much

When you buy a home, most people focus on the price of the house. But what really determines affordability is the monthly payment — and interest rates directly control that.

What’s happening with rates right now

After peaking over the last couple of years, rates have started trending downward. While they’re not back to historic lows, the direction matters because it encourages sidelined buyers to re-enter the market.

• Improved consumer confidence
• More buyer activity
• Healthier market momentum

What this could mean for 2026

Industry forecasts including Keller Williams project roughly a 14% increase in home sales in 2026 as affordability improves and paused buyers return to the market.

More buyers returning increases competition, improves seller confidence, and stabilizes pricing in many Midwest markets.