What's in store for our money in 2026?
What's in store for our money in 2026?
As the new year approaches, think about 2026 like one big game of chess.
In any chess match, you’re not just looking at where the pieces on the board are currently. You are trying to envision where they will be a few moves from now, to help you make better decisions.
The same goes for your finances. If you know what the chessboard is going to look like next year — whether we’re talking about inflation, or credit scores, or interest rates, or housing prices — then you can be more thoughtful about plotting your next move.
“By 2026, the U.S. economy is expected to look more stable and predictable,” says Constantine Tsantes, a planner with VLP Financial Advisors in Vienna, Va. “Overall growth is expected to be steady, not booming. For consumers, that means focusing on stronger credit, planning major borrowing carefully, and taking advantage of a more balanced financial environment.”
To be honest, macroeconomic data tends to make anyone’s eyes glaze over. But the reality is that the data impacts us all at a deeply personal level: what interest we’ll be getting on our savings, how much inflation will be driving up our costs, or whether the housing market is favoring buyers or sellers.
That in mind, Current shares insights about what the economic landscape may look like in 2026.
Inflation: This is a figure that’s top-of-mind for most consumers, since we encounter it frequently at the grocery store. Current inflation projections for 2026’s first quarter are 3.0%, according to the Survey of Professional Forecasters compiled by the Federal Reserve Bank of Philadelphia. That’s up significantly from the previous estimate of 2.6%, indicating that higher prices are proving pretty stubborn.
The good news is that inflation is expected to moderate by the end of 2026, down to 2.6%. One way to cope with this trend is to ensure that your cash savings are, at the very least, outpacing these inflation numbers. You’ll want to look for a savings account that offers a high-yield, such as 4% APY or above.
Credit scores: Recent data shows that FICO scores dropped to an average of 715 in 2025, down a couple of points from the previous year. That’s the second year in a row of declines, after many years of credit scores ticking up.
One reason for that is student loans, since payments are now being reported again to agencies after years of pandemic-related pauses. With household budgets squeezed, credit scores could continue to face pressures in 2026. In fact, the American consumer is looking pretty “fragile,” according to recent comments from JPMorgan Chase’s head of consumer banking, Marianne Lake.
That’s why it’s so important to bolster your credit record, which will make you more attractive to lenders and open up a universe of more favorable rates on loans. One option is to use a secured credit card, which protects you against falling into debt as you can only spend the amount of money in your account. You’ll want to look for one with low or no minimum deposit requirement and that reports to all three credit bureaus.
Home prices: The good news for buyers is that the housing market is moderating, after many years of big gains that made the American dream seem unaffordable to many. For 2026, Realtor.com is forecasting an average 2.2% increase in home prices; compare that to 2024 and its 4.5% price increase. Many metro areas are actually in outright decline, with more than half of U.S. homes losing value in the last year, according to real estate site Zillow.
Combine that with lower mortgage rates, and homeownership becomes more within reach. Next year’s expectations are for 6.3% average home loans, according to Realtor.com, down from 6.7% in 2024.
A buyer’s best weapons for affordability: A better credit score and a bigger down payment. “Preparing early, by improving credit and reducing debt, will matter more than perfectly timing the market,” says Tsantes.
Interest rates: The Federal Reserve Board just dropped its baseline interest rate to a range of 3.5-3.75%, which represents a quarter-point cut. This move typically trickles into many other areas of the economy, everything from interest being offered on savings accounts to rates being charged on car loans or mortgages.
This is the third cut this year, with the Fed signaling more potential cuts in 2026 and 2027. This downward pressure, as the Fed tries to juice an economy suffering from weakening jobs numbers, suggests that the rates savers have been enjoying won’t continue at lofty levels.
Says Tsantes: “Even as rates decline, high-yield savings and short-term fixed income may remain attractive relative to the past decade.” Indeed, any healthy rates you can lock in now – whether high-yield accounts, or fixed-income returns, or even Certificates of Deposit – will have your future self feeling pretty good about 2026.
This story was produced by Current and reviewed and distributed by Stacker.
