Rising Home Prices: Setting the Stage for 2026

Mortgage rates stayed elevated through 2024 while prices kept inching up, a combination that has made entry-level listings in Grand Forks competitive, according to the Freddie Mac Primary Mortgage Market Survey and recent market snapshots from local Realtors (Freddie Mac). From split-levels near the Greenway to newer builds around the Alerus Center, the pattern has been steady: fewer affordable homes on the market and more buyers trying to time their move.

For many households, 2026 is the planning horizon—enough time to save, watch rates, and see whether new construction meaningfully expands supply. Air Force families rotating through Grand Forks AFB and UND staff looking ahead to academic-year moves often work on two- to three-year timelines, which makes the next 18–24 months consequential for budgeting and timing, local housing counselors say.

What happens next will hinge on interest rates, local job stability, and federal housing policy. The Federal Reserve’s path for inflation and rates will shape mortgage costs, while regional hiring in aerospace, health care, and UND-related research will influence demand, according to the Federal Reserve’s policy outlook and the Grand Forks Chamber’s business updates (Federal Reserve; Grand Forks Chamber of Commerce). National programs—like changes to FHA loan limits, VA loan access for service members, or flood insurance pricing—will also ripple through the Red River Valley.

Historical Context and Market Dynamics

Grand Forks followed the national pattern of rapid appreciation during 2020–2022, a slower pace in 2023, and continued moderate price gains in 2024, according to the Federal Housing Finance Agency’s House Price Index for the West North Central states (FHFA HPI). The shift from historically low mortgage rates to higher ones cooled demand somewhat, but low inventory preserved sellers’ leverage in many neighborhoods.

Inflation and wage growth have been key swing factors. As inflation eased from 2022 highs, borrowing costs remained sticky because the Fed kept rates elevated to lock in progress, according to the Bureau of Labor Statistics and Federal Reserve communications (BLS CPI; Federal Reserve). Historically, when inflation trends down and rates follow, purchasing power improves—often bringing sidelined buyers back into the market.

Local business confidence and population flows matter, too. The Chamber’s employer updates point to steady hiring in aviation and health services, with UND enrollment and research activity underpinning demand for rentals and starter homes near campus and the south end (Grand Forks Chamber of Commerce; UND News). If those trends hold, they provide a floor under demand even as rates normalize.

Buyer Impact: What to Expect and How to Prepare

First-time buyers and VA-eligible households from Grand Forks AFB will feel any affordability squeeze most acutely because small changes in rates can move monthly payments, according to Freddie Mac’s rate tracking and VA loan guidance (Freddie Mac). Long-term investors may see steadier returns if rents keep pace with costs, but cash flow will depend on financing terms and local vacancy rates.

Should you buy now or wait? If you find a home that fits your budget and needs, financing strategies—such as seller concessions toward closing costs, 2-1 buydowns, or VA/FHA options—can make “now” workable while leaving room to refinance later if rates ease, according to lender playbooks and consumer guidance from the North Dakota Housing Finance Agency (NDHFA). If your situation allows, building savings and strengthening your credit through 2025 could unlock better terms in 2026 should rates and inventory improve.

Expect incremental changes rather than a sharp swing. Most national outlooks see slower price growth—not broad declines—if inflation continues to cool and supply improves, according to forecasts from Fannie Mae’s Economic & Strategic Research group and Realtor.com’s annual housing outlook (Fannie Mae Forecast; Realtor.com Research). Locally, any acceleration in new construction or city infill approvals would matter more for affordability than small national shifts.

Quick steps for 2024–2025:

• Get preapproved and price out payments at multiple rates to stress-test your budget (6.5%, 7%, 7.5%).

• Ask about VA, FHA, and NDHFA first-time buyer programs; check income and purchase price limits.

• Track neighborhood-level days-on-market and price cuts rather than relying on national averages.

Voices and Expertise: Insights from the Field

Local agents report that move-in-ready homes under common VA and FHA appraisal thresholds still draw strong interest, while higher-priced listings are more sensitive to rate moves. That pattern aligns with national data showing demand concentration in affordable price bands when borrowing costs are high, according to Realtor.com’s segmentation research (Realtor.com Research).

National economists caution against betting on a price drop as a strategy. Several forecasts point to “gradual normalization” as the Fed moves carefully to avoid reigniting inflation, which would keep mortgage rates elevated longer than buyers prefer, according to Fannie Mae’s ESR Group and communications from the Federal Reserve (Fannie Mae Forecast; Federal Reserve).

Housing advocates and city planners say supply is the key lever for affordability in Grand Forks. Adding starter homes, duplexes, and townhomes near job centers and along transit corridors can ease pressure on prices over time, a priority echoed in City of Grand Forks planning materials and regional housing assessments (City of Grand Forks).

Outlook: Planning Ahead for Prospective Buyers

Policy decisions to watch include the Fed’s rate path, potential tweaks to federal mortgage programs, and FEMA’s ongoing work on flood maps that affect insurance costs in neighborhoods near the Red River, according to federal agency updates (FEMA Flood Map Service Center; Federal Reserve). At the state level, lawmakers have debated property tax relief and housing incentives in recent sessions; any changes ahead of 2026 could shift carrying costs and builder activity, based on past North Dakota legislative actions.

Your best advantage is preparation. Build a 3–6 month emergency cushion, keep your credit file clean, and price out ownership costs beyond principal and interest—property taxes, insurance (including flood where applicable), utilities, and maintenance. In parallel, monitor new listings around UND, the south end, and corridors to Grand Forks AFB, where buyer competition and commute tradeoffs differ block by block.

Resources for Grand Forks buyers:

• North Dakota Housing Finance Agency — down payment/closing cost help and first-time buyer programs: ndhfa.org

• Grand Forks Housing Authority — counseling and local program info: gfha.org

• City of Grand Forks Planning & Community Development — zoning and infill updates: grandforksgov.com

• Grand Forks Air Force Base Housing & PA — on-base housing and PCS timelines: grandforks.af.mil

What to Watch

• The next several Federal Reserve meetings and inflation prints will set the tone for 2025–2026 mortgage costs; watch for sustained declines before assuming lower rates.

• Spring 2025 listing activity and local building permits will signal whether inventory relief is coming in time for 2026 buyers.

• Any updates to FEMA flood maps or North Dakota property tax policy could affect monthly costs in specific Grand Forks neighborhoods, especially near the Red River and along the Greenway.