2026 Housing Market Reset: Slower Prices and Lower Mortgage Rates Ahead
A potential shift in the US housing market is on the horizon for 2026. After years of high costs and stagnant ownership rates, experts predict slower price growth and lower mortgage rates. Meanwhile, political and advocacy groups are joining forces to tackle long-standing affordability challenges.
For the first time since the Great Recession, income growth is set to outpace home prices next year. Median sale prices will likely rise by just 1%, down from 2% in 2025. Mortgage rates are also forecast to drop into the low 6% range, easing pressure compared to the 2025 average of 6.6%.
Yet affordability remains a hurdle for younger buyers. Homeownership rates among Gen Z and millennials have not improved over the past year. High sale prices, insurance premiums, and utility costs continue to strain budgets, pushing more adult children to move back in with parents.
Political momentum is building to address the crisis. The Democratic and Republican parties, alongside groups like the Bipartisan Policy Center and the National Low Income Housing Coalition, are collaborating on solutions. This rare cross-party effort signals growing recognition of the need for change.
The expected market adjustments, dubbed the 'Great Housing Reset', may encourage more buyers to return. But for many younger Americans, the path to homeownership remains uncertain.
The 2026 housing market could bring modest relief through lower mortgage rates and slower price growth. Bipartisan cooperation also offers hope for long-term solutions. Still, high living costs and stagnant ownership rates mean affordability challenges will persist for younger generations.
