2026 Kickoff: The Rhode Island Real Estate "Reset"

Happy New Year, Rhode Island! As we shake off the confetti and head into 2026, the real estate market in the Ocean State is finally starting to feel like it’s catching its breath.

If you’ve been sitting on the sidelines—whether you’re in Johnston, Cranston, or over in Warwick—the "Great Housing Reset" is officially underway. Here is a casual, hyperlocal breakdown of what’s happening right now and what it means for your wallet.

1. The Inventory Puzzle: Fewer Houses (For Now)

We are starting January with tight inventory. In Johnston, the median home value is currently hovering around $489,900. Homes are still moving fast, typically going to pending in just about 21 days.

The "lock-in effect" is still real: many of your neighbors are holding onto those 3% mortgage rates. However, the tide is turning. We expect active listings to grow by about 9% this year as life changes (new jobs, growing families) finally push people to move.

2. Rates are Taking the Stairs Down

The "escalator" ride up for interest rates is over. As of today, January 2nd, 30-year fixed rates are averaging around 6.27%.

• The Forecast: Experts expect rates to settle into a "slow slide," potentially dipping into the high 5% range by late spring.

• The Impact: Even a half-percent drop makes a massive difference in your monthly payment, which is already bringing buyers back into the Rhode Island market who were priced out last summer.

3. Assumable Mortgages: The Secret Weapon

You’re going to hear the term "Carry-On" or Assumable Mortgage a lot more this year. If you are selling a home with a government-backed loan (like an FHA or VA loan), a buyer might be able to "assume" your low interest rate. In a market like ours, having a 3.5% rate that a buyer can take over is like having a "For Sale" sign made of gold. It’s a huge selling point that can help you get top dollar.

4. Actualizing Capital Gains: The "More Homes on the Market Act"

Many Rhode Islanders have seen their home values skyrocket over the last few years. While that’s great for your net worth, it creates a "tax trap" because federal capital gains exemptions haven't changed since 1997.

In 2026, there is a big push in Congress for the "More Homes on the Market Act," which aims to double those tax exemptions to $500k for individuals and $1M for couples. Many local homeowners are preparing to sell this spring to finally "actualize" those gains and move into their next phase of life without giving a huge chunk to Uncle Sam.

5. Local Alert: The "Conveyance Tax"

Heads up to my fellow Rhode Islanders: The state's 2026 budget includes a significant shift in the Real Estate Conveyance Tax.

• The Change: For residential properties sold for over $800,000, there is now a "Tier 2" rate.

• The Strategy: If your home is in that higher price bracket, the timing of your sale is more important than ever. We need to look at your specific numbers to ensure you keep the most money in your pocket.

What’s Your Next Move?

The 2026 market is about strategy, not speed. Whether you’re looking to buy your first place in Johnston or sell and head over the border into Massachusetts, you need a plan that accounts for these new tax laws and shifting rates.

Ready to see what your home is worth in this new 2026 landscape? I’ve been helping families navigate RI and MA real estate for the last couple of years, and I’d love to help you too. Let’s grab a coffee and talk about your goals.

Guillermo Hurtado RE/MAX 1st Choice Phone: 508-493-9344

Web: ghurtadorealtor.com

Email: guillermohurtado.realtor@gmail.com