Early next year incomes are predicted to be rising faster than home prices for a prolonged period for the first time since the Great Recession era.
https://ktvz.com/stacker-money/2025/12/04/2026-housing-market-predictions-according-to-redfin/2026 housing market predictions, according to Redfin
U.S. homebuyers will start to get some relief in 2026, with affordability improving as income growth outpaces home-price growth. Next year will mark the beginning of a long, slow recovery for the housing market.
“The Great Housing Reset” will take shape in 2026. It won’t be a quick price correction, and it won’t be a recession. Instead, the Great Housing Reset will be a yearslong period of gradual increases in home sales and normalization of prices as affordability gradually improves. It will start next year, with incomes rising faster than home prices for a prolonged period for the first time since the Great Recession era.
It won’t be enough to make homebuying affordable in the short run for Gen Zers and young families, who will be forced to make tradeoffs, from moving in with roommates or their parents to delaying having children. Politicians on both sides of the aisle will respond to the widespread housing affordability crisis, introducing policies to lower costs, including YIMBY measures and expanded manufactured housing. Some of those proposals will chip away at affordability, but they won’t be an instant fix.
Prediction 1: Mortgage Rates Will Dip to Low-6% Range, One Factor Improving Affordability
Mortgage rates will continue their slow slide but remain high relative to the pandemic era. The 30-year fixed rate will average 6.3% for the entire year, down from its 2025 average of 6.6%.
