Housing Market Shift: Affordability to Improve in 2026

A notable shift is anticipated in the housing market starting next year, moving away from its recent frozen state. Economists predict that home sales will begin to rise, accompanied by capped or even decreasing prices. This reversal is driven by incomes growing faster than home values, improving affordability for the first time in several years. This outlook suggests a "Great Housing Reset" is underway.

Previously, high prices and limited supply discouraged buyers, leading to cooled demand. Now, conditions are becoming more favorable for house hunters. Sellers are increasingly offering significant discounts, with some offering cumulative price cuts of up to $25,000, helping to align listings with buyer budgets. This dynamic is fueling a more active fall market and rewarding patient buyers.

This projected "new era" of improved affordability does not hinge on drastically lower mortgage rates. Experts expect rates to remain in the low 6% range, a level conducive to increased sales without causing prices to overheat. Meanwhile, a substantial number of homeowners who delayed moves for years may re-enter the market, potentially adding to supply and further rebalancing conditions.