The 2026 market prediction from Redfin offers a cautious but hopeful glimpse into the future of U.S. housing. Instead of volatility, the next chapter looks stable and slow-moving — with moderate price growth, steady sales, and a potential return of affordability for many buyers. This shift, which Redfin calls the “Great Housing Reset,” could open the door for more sustainable housing activity after years of extreme price swings and rate shock. For mortgage and real estate professionals, it’s a critical time to prepare clients for a market defined by balance, not chaos — and to re-engage with those who’ve been sitting on the sidelines.
The Great Housing Reset: What 2026 Might Look Like
Redfin’s 2026 housing forecast suggests a slow but steady normalization of the market. After the extreme ups and downs of the pandemic boom and subsequent rate hikes, 2026 is shaping up to be a year of mild recovery — and perhaps even a touch of relief for both buyers and sellers.
Key predictions include mortgage rates easing slightly to an average of 6.3%, a modest dip from the higher levels seen in 2023–2025. This drop, while not dramatic, could help boost affordability for would-be homebuyers. Meanwhile, home prices are expected to rise by just 1% year-over-year — a huge contrast to the double-digit surges of the past few years. This moderation in price growth, combined with stronger wage growth, may finally tip the affordability scales in favor of buyers.
Existing home sales are expected to rise about 3% over 2025 levels, reaching approximately 4.2 million transactions. While this doesn’t mark a full return to pre-pandemic activity, it does suggest that more homeowners may be willing to list — especially as mortgage rate lock-in begins to ease. Redfin points out that the mortgage-rate spread (the difference between existing rates and new loan offers) will shrink, giving more sellers a financial reason to make a move.
Importantly, Redfin forecasts that wage growth will finally outpace home-price growth in 2026. That’s a big deal. For years, home prices have far outstripped income gains, pushing many buyers out of the market. If that dynamic flips, even slightly, it could signal a turning point for housing affordability and demand — especially among first-time and entry-level buyers.
However, Redfin cautions that this return to balance won’t be felt evenly. Some metro areas will continue to struggle with affordability, and inventory challenges may linger in high-demand regions. Rent growth is also expected to continue in many cities, keeping the pressure on renters and potentially driving more interest in homeownership. But overall, this is not a forecast of crash or correction — it’s a forecast of healing and recalibration.
This “reset” is not without challenges, but it provides an opening for real estate and mortgage professionals to shift their messaging from urgency to long-term strategy. It’s also a prime moment to reconnect with potential buyers and sellers who paused their plans over the past few years, helping them understand how a stable market can still be a strong market — if approached with the right mindset.
Loan Officer Perspective
For LOs, this is a golden window to re-engage with both purchase and refinance prospects. Even though rates remain elevated historically, they’re softening enough to make a difference — especially if paired with wage growth and slower home price appreciation. Use this as a time to educate clients about affordability trends, payment strategies, and creative loan options.
Real Estate Agent Perspective
Agents can position themselves as guides through this new era of balance. Clients may not feel urgency, but they will need clarity and strategy. Use this stable environment to highlight long-term equity gains, the cost of renting versus buying, and why today’s market offers a healthier foundation for sustainable homeownership.
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