For the past several years, even higher-income households have found themselves asking a question they may not have expected a decade ago: “Will I ever be able to buy a home?”
Between rapid price appreciation, limited inventory, and recent elevated mortgage rates, the housing market has felt out of reach for many buyers over the past few years — even those with strong incomes and significant assets.
As we head into the 2026 housing market, some of those pressures are finally starting to ease.
Price growth has cooled, inventory is increasing in a number of regions, and mortgage rates — while still much higher compared to the ultra-low levels of the early 2020s — are beginning to stabilize. For affluent families, that shift creates a very different environment than the one we saw from 2020 through 2024.
At the same time, second homes still play a meaningful role for affluent families — as lifestyle assets, longer-term planning tools, and future retirement options. Recent shifts point to a more rational, balanced 2026 real estate market, one where well-prepared buyers can act with intention.
In this article, we’ll break down what that means for affluent households considering buying — or selling — a second home in the year ahead.
Will I Ever Be Able to Buy a Home? Why 2026 Looks Different
In recent years, many households — including those with high incomes, strong balance sheets, and disciplined savings — have asked a quietly uncomfortable question: “Will I ever be able to buy a home?”
It’s a question that reflects more than frustration. It reflects a market that, for much of the past decade, felt unbalanced and unpredictable.
But as we move into 2026, the answer is beginning to look different.
After a long stretch defined by rapid appreciation, limited supply, and intense competition, the real estate market is finally slowing down in ways that matter for prospective buyers. We’re seeing:
- Moderating prices across a wider range of markets.
- Increasing inventory, giving buyers more choice.
- Cooling price pressures as the frenzy of 2020-2023 continues to settle.
- More balanced negotiations, after years of seller-driven dominance.
In the Sacramento and Tahoe regions, rising inventory and more flexible sellers are giving affluent buyers renewed leverage.
So, will you ever be able to buy a home?
For many, the honest answer in 2026 is: yes — if you understand what’s changing, and you approach the decision strategically.
Second Homes in 2026: How Demand, Costs, and Rules Have Evolved
The appeal of second homes has shifted meaningfully since the post-pandemic surge, when buying a second home felt like a race and inventory vanished overnight. As we move into 2026, the market looks different — not weak, but perhaps more rational.
Demand remains solid, particularly among affluent households, but buyers today are more measured. The impulse-driven purchases of 2021 and 2022 have given way to clearer priorities: longer-term planning, financial discipline, and a focus on value rather than urgency.
For the thoughtful second home buyer, that’s a healthier market to step into.
One factor reshaping the landscape is regulation. Many municipalities — including popular vacation and lake-adjacent communities — have introduced new or tighter rules around short-term rentals.
These changes don’t eliminate the financial opportunity, but they do shift the expected ROI and require buyers to approach buying a second home with eyes wide open. Rental income may still help offset ownership costs, but it oftentimes is no longer be the sole driver of the decision.
Despite these evolving conditions, affluent buyers continue to pursue second homes for reasons that extend beyond traditional returns:
- Asset diversification, especially during periods of market volatility.
- Multi-use utility, blending family connectivity, personal enjoyment, and occasional rental use.
- A sense of “lifestyle ROI,” where value isn’t measured solely in dollars but in experiences, legacy, and longer-term planning.
- Retirement preparation, with some buyers securing a future primary residence early.
The key is balancing emotional desire with sound financial strategy. A second home can be both a meaningful lifestyle asset and a strategic component of a longer-term wealth plan — but only when buyers take the time to assess the full picture: financing, regulations, liquidity, usage patterns, and the role the property will play in their broader financial life.
For well-prepared households, 2026 offers a more stable, more transparent environment to make those decisions with confidence.
Is the Real Estate Market Slowing Down Going Into 2026?
One question we’re hearing more often as we approach 2026 is: “Is the real estate market slowing down?”
The short answer is yes; however, a slowing market is not a crashing one.
After several years marked by rapid appreciation, historically low interest rates, intense buyer competition, and historically low inventory, we’re seeing signs of the market settling into a more sustainable rhythm. The data behind that shift is clear:
- Inventory is rising, giving buyers more options than they’ve had since before the pandemic.
- Price cuts are becoming more common, particularly at the higher end of the market.
- Days on market are increasing, signaling less urgency and more space for due diligence.
- Interest rates are appearing to level off, allowing households to plan with greater stability.
These are indicators of normalization — not distress.
And, while we’re at it, it’s important to address another question that tends to surface whenever the market cools: “Are we in a real estate market bubble?”
From a data standpoint, the conditions we’re seeing today look nothing like a bubble.
- Lending standards remain disciplined.
- Homeowners have significant equity.
- Inventory levels, while rising, are still nowhere near the oversupply that preceded 2008.
- There is no single catalyst — financial or structural — that resembles past collapses.
In other words, the 2026 softening is expected and structural, a natural comedown from years of dislocation and excess demand.
For affluent investors, that shift is meaningful. A slowing market brings something that has been missing for a long time: choice, negotiation power, and balance. It allows buyers to act deliberately instead of reactively — to evaluate a property based on goals, lifestyle, and longer-term planning rather than fear of missing out.
In an environment like this, well-prepared households are often the ones who find the most compelling opportunities.
Housing Market 2026: What Buyers Should Be Watching
As we look toward the housing market of 2026, one theme is becoming increasingly clear: after several years of volatility and unpredictable swings, the market is finally entering a period that resembles something closer to normal.
That doesn’t mean price declines everywhere or bargain hunting across the board. Instead, 2026 is shaping up to offer slower, more sustainable appreciation, predictable seasonal patterns that were disrupted during 2020-2023, regional divergence (where some markets cool while others stabilize or grow), and a shift from emotional, urgency-driven markets to ones grounded in fundamentals.
In the Sacramento region — and in second-home destinations like Tahoe and El Dorado Hills — those shifts are becoming more visible. The high-end segment is adjusting to more realistic pricing. Move-up buyers, who paused during the rate spikes of 2023-2024, are re-entering the market. And migration patterns are calming after several years of dramatic inflows and outflows.
For buyers, this creates strategic openings that weren’t available during the peak years, such as less competition for well-located properties, softer pricing in certain luxury segments, more motivated sellers, and greater value for patient buyers who prioritize fit and long-term utility.
In other words, 2026 may reward disciplined buyers who are willing to take their time, evaluate opportunities, and make decisions based not on a rushed desperation, but on clarity of purpose.
Second Home Loan Rates in 2026: What’s Different Now?
Even as the broader market normalizes, one factor remains consistent: second home loan rates continue to sit above primary mortgage rates. That premium isn’t new, but in 2026, it’s becoming more predictable.
After the dramatic rate spikes seen between 2023 and 2025, rates for second-home mortgages are stabilizing. While still higher than what buyers became accustomed to in the 2010s, they are no longer climbing at the pace that made long-term planning so difficult.
Lenders remain focused on fundamentals when evaluating applications for a second home:
- Adequate reserves to support two properties.
- Strong credit, often requiring higher minimums.
- Debt-to-income ratios that account for the possibility of a vacant second home.
- Intended use, since rental activity can quickly shift a property into “investment” classification.
For affluent buyers, financing strategies have expanded as markets and lending guidelines have evolved. Options often include:
- Jumbo loans with competitive terms.
- Portfolio lending, especially beneficial for complex financial profiles.
- Asset-based lending, where investment portfolios support borrowing.
- HELOCs or home equity strategies tied to an existing primary residence.
The key is recognizing that a higher-rate environment does not necessarily eliminate opportunity.
For well-capitalized buyers, financing is just one component of a broader plan. With the right analysis and structure, a second home can make sense even when rates are elevated — because the decision is rooted in utility, longer-term planning, and personal goals, not shorter-term rate movements.
The Most Important Questions to Ask When Buying a Second Home in 2026
Buying a second home is both a financial decision and a lifestyle one. In 2026, the best opportunities will belong to buyers who evaluate both sides with equal care.
1. Financial Considerations
Before purchasing, affluent buyers should understand the full cost of ownership:
- How will carrying a second mortgage affect cash flow?
- What are the liquidity trade-offs when allocating capital to real estate?
- Are you prepared for property taxes, insurance premiums, and HOA dues, which are often higher for second homes?
- How does the complexity of maintaining two properties fit into your financial and personal bandwidth?
2. Tax Considerations
Rules around second homes remain nuanced. Key questions include:
- How much mortgage interest can you deduct on a second property?
- How do SALT limits impact the tax benefit of ownership?
- If you plan to sell another property, what does capital gains planning look like?
- If you intend to rent the home part-time, what are the tax reporting requirements and usage thresholds?
3. Lifestyle Considerations
This is where many buyers underestimate the long-term implications. Ask yourself:
- Will you use the home as often as you imagine?
- How does travel time impact the likelihood of regular visits?
- How might family dynamics evolve, and how will that affect how the property is used?
- Does the home fit your life today and five to ten years from now?
A second home can be incredibly rewarding, but only when the decision aligns with both present needs and future plans.
Why a Strong Financial Plan Matters More Than Ever
For households with a strong financial footing, the housing market of 2026 may offer some of the best second-home opportunities in years.
After a long stretch of constrained supply, bidding wars, and rapid appreciation, many second-home markets are finally softening. Prices are leveling, sellers are more realistic, and negotiations — once nearly impossible — are becoming normal again.
Financing conditions are improving as well. Jumbo lending is more flexible than it was during the rate spikes of 2023 and 2024, and although rates remain elevated compared to the pre-pandemic decade, they are more stable. Stability, even at higher levels, brings clarity… and clarity makes planning easier.
Periods of uncertainty often create hesitation, but for affluent buyers, they also create strategic openings. But even in a favorable environment, buying a second home is not simply a real estate decision — it is a long-term financial commitment. This is where thoughtful, integrated financial planning with a fiduciary financial advisor becomes essential.
A strong plan should address:
- Liquidity planning, ensuring the purchase doesn’t restrict future flexibility.
- Cash flow modeling to show how two properties affect ongoing expenses.
- Tax optimization, including mortgage interest rules, SALT limits, rental use, and capital gains considerations.
- Stress-testing carrying costs, from insurance and property taxes to maintenance and potential vacancies.
- Alignment with retirement goals, especially if the second home may one day become a primary residence.
- Coordination with your estate and broader wealth strategy, so the property complements—rather than complicates—your long-term plan.
Real estate should support your life, not dictate it. A second home can be a meaningful and strategic asset when the decision is grounded in your financial capacity, your goals, and the role the property plays in your overall plan.
At Towerpoint Wealth, our guidance is rooted in clarity, not urgency. The housing market of 2026 may be slowing, but that slowdown is creating real opportunities for disciplined buyers.
Our team helps clients:
- Evaluate the right financing structure.
- Compare second-home ownership with investment property strategies.
- Model long-term financial and tax outcomes.
- Integrate real estate decisions into a coordinated wealth, retirement, and estate plan.
Our goal is simple: to help you navigate the 2026 real estate landscape with confidence, clarity, and a longer-term perspective, not pressure.
Final Thoughts
As we look ahead, 2026 may be one of the most balanced, opportunity-rich real estate environments we’ve seen in more than a decade — especially for affluent households considering a second home. The frenzy has faded, the market is regaining structure, and buyers once again have room to think, evaluate, and act with intention.
But opportunity alone isn’t a strategy.
The strongest real estate decisions — whether buying or selling — are made when the financial, tax, and lifestyle implications are all understood in context. With the right planning, a second home can enhance your life today while supporting your long-term goals, retirement plans, and family legacy.
If you’re exploring whether 2026 is the right time to make a move, we’re here to help you evaluate your options with clarity, confidence, and a calm long-range perspective. We invite you to schedule a complimentary 20-minute “Ask Anything” conversation with our team.
At Towerpoint Wealth, we work together to help you assess whether buying or selling a second home aligns with your broader financial plan — and guide you toward the decision that truly serves your life and goals.
