Redfin’s 2026 outlook describes a significant turning point in the U.S. housing market. Termed “The Great Housing Reset,” 2026 is projected to be the first year since the Great Recession where income growth consistently outpaces home-price growth, finally offering some relief to sidelined buyers.
1. The Dawn of Improved Affordability
Unlike previous years of skyrocketing prices, Redfin predicts a much cooler pace for 2026. The median home-sale price is expected to rise just 1%. With wages projected to grow at a faster rate, the “affordability gap” will slowly begin to close.
2. Mortgage Rates & The Refi Surge
- Average Rates: Mortgage rates are expected to stabilize around 6.3%.
- Refinance Boom: A 30% surge in refinance volume is anticipated as homeowners who locked in peak rates during 2024 and 2025 move to lower their monthly payments.
3. A Shift in How Americans Live
The forecast suggests that high housing costs are permanently changing American demographics:
- Multigenerational Living: More adult children will live with parents (and vice versa) to pool resources.
- The “Roommate” Economy: A rise in friends buying homes together with legal “co-buying” agreements.
- Birth Rates: Redfin predicts housing costs will continue to put downward pressure on the national fertility rate.
4. Regional Winners and Losers
The “Zoom Towns” of the pandemic era (like Austin and Nashville) are expected to cool further, while “Value Hubs” in the Midwest and Great Lakes—as well as NYC commuter suburbs—will see increased demand due to their relative affordability and return-to-office mandates.
Forecast Table: 2025 vs. 2026 (Redfin)
| Metric | 2025 (Estimated) | 2026 (Forecast) |
|---|---|---|
| Existing-Home Sales | Underwhelming (~4.0M) | 4.2 Million (+3%) |
| Median Home Price Growth | ~3% | +1% |
| Average Mortgage Rate | 6.7% | 6.3% |
| Refinance Volume Growth | Low | +30% |
| National Rent Growth | Flat/Slight Growth | +2% to +3% |
Conclusion
According to Redfin Chief Economist Daryl Fairweather, 2026 isn’t a quick fix, but a “years-long period of gradual increases in home sales and normalization.” It is the start of a healthier, more balanced era for American real estate.
Source: Summary based on Redfin’s “Welcome to The Great Housing Reset” 2026 Predictions.