Does a low appraisal mean I have to walk away from the house?

No, a low appraisal just means the lender will only finance against the appraised value, leaving an appraisal gap you must address. You have several options: renegotiate the price down with the seller, split the difference, pay the gap in cash on top of your down payment, dispute the appraisal with better comparable sales, or order a second appraisal. If your contract has an appraisal contingency, you can also walk away and keep your earnest money. In competitive 2026 markets, some buyers pre-commit to covering a set appraisal gap to strengthen their offer. Which route is smart depends on how much cash you have and how much you want the home — don't overpay just to win.