For countless Americans who have spent the past several years watching the frenzied pandemic-era housing boom slip frustratingly out of reach, the year 2026 may finally represent a long-awaited window of opportunity. According to a newly released report from Redfin, the real estate firm anticipates a transformative shift beginning next year—an emerging period it characterizes as “The Great Housing Reset.” Analysts suggest that this change will not be a brief or superficial adjustment, but rather the start of a gradual, multi-year realignment within the housing sector. During this period, home sales are expected to rise at a measured pace while affordability slowly improves, primarily because wage growth is projected to outstrip the pace of home price appreciation for the first sustained time since the aftermath of the Great Recession.
Redfin’s economists project a gentle but persistent downward trajectory for mortgage rates throughout 2026, easing some of the financial tension that has long constrained potential buyers. By the end of that year, the median price of homes sold nationwide is expected to register only a modest increase of about one percent compared with the previous year, a dramatic slowdown relative to the explosive gains seen earlier in the decade. Meanwhile, existing-home sales—those involving previously owned residences—are forecast to grow by roughly three percent from 2025 levels, pushing the total annualized volume of transactions to around 4.2 million. This anticipated upturn in activity is attributed in part to the diminishing “rate-lock” phenomenon, a term used to describe the tendency of homeowners with ultra-low mortgage rates to avoid selling, fearing that new loans would carry higher borrowing costs. As this psychological and financial barrier dissipates, more owners are likely to list their properties, thereby infusing the market with much-needed inventory.
Daryl Fairweather, Redfin’s chief economist, elaborated on this trend in a conversation with *Business Insider*, explaining that the market is poised to loosen as those once reluctant sellers reenter the fray. She emphasized that during the pandemic, record-low interest rates generated an unprecedented wave of homebuying activity, creating a surge that consumed available listings and propelled prices upward. Typically, homeowners remain in their residences for about a decade, and given that five years have now elapsed since the early months of the pandemic, many of those who purchased then are naturally reaching a stage when moving or upgrading becomes more likely. Fairweather cautioned that the resulting increase in sales will not constitute a dramatic upheaval but rather a gradual rebalancing—a subtle easing of the market’s tightness as normal transaction patterns slowly resume.
The housing market, which spiraled into near-chaotic conditions during the height of the pandemic, finally appears to be entering a period of stabilization after years of volatility. This extraordinary disruption originated in the early 2020s, when the United States government, in response to the economic shock of the COVID-19 crisis, introduced sweeping fiscal stimulus measures to prevent a deep recession. Coupled with historically low mortgage rates, those policies inadvertently ignited one of the most intense waves of demand the housing industry has ever experienced. Between late 2020 and 2021, home prices soared to record-breaking levels, further amplifying the nation’s longstanding shortage of available housing and leaving millions of aspiring homeowners sidelined.
The lingering consequences of that period have defined the market ever since. For years, purchasing a home has seemed unattainable for large swaths of Americans, particularly younger generations such as millennials and members of Generation Z. These potential buyers have watched with dismay as interest rates surged from their pandemic lows, entry-level homes grew scarce, newly built properties became smaller and more expensive, and the amount of cash required for down payments and closing costs escalated dramatically. Yet, as 2025 draws to a close, subtle indicators suggest a turning point. In numerous cities—including former pandemic-era hotspots such as Austin, Texas, and Tampa, Florida—demand has cooled enough that houses now linger on the market longer than before. This shift has compelled sellers to lower asking prices, extend concessions, and offer creative incentives to attract increasingly selective buyers who now hold a measure of leverage.
Redfin analysts believe that these evolving dynamics, together with declining mortgage rates, are likely to pull more prospective buyers off the sidelines and back into the market. However, they also caution that even as conditions improve incrementally, the overall landscape will remain challenging. Affordability, though improving modestly, will continue to represent a formidable obstacle for many—especially younger Americans still contending with student debt, stagnant savings, and rising living costs. According to Fairweather, the next phase will not evoke the frenetic energy of a renewed buying spree but will rather reflect a normalization of market behavior, a return to the steadier rhythms that characterized the pre-pandemic era. Prices will remain elevated relative to historical norms, but she underscores that wages have climbed substantially since 2018 and 2019, potentially empowering a broader share of households to feel that the dream of homeownership is once again within reach—if not easy, then at least attainable for the first time in years.
Sourse: https://www.businessinsider.com/why-buying-a-home-might-be-more-affordable-in-2026-2025-12
