"The U.S. housing market is entering a new era. After four years of slow sales, rising prices and relentless affordability challenges, we're finally seeing conditions shift in favor of buyers. The newly released 2026 Compass Intelligence Housing Market Outlook, details how affordability is set to improve gradually over the coming year. But, it won't happen through a dramatic price correction, but through an extended period of flat home prices, rising incomes and moderating mortgage rates. The change will be slow, but it's underway."
"Our base-case forecast for 2026 calls for home prices to be essentially flat, up just 0.5% nationally, with a plausible range from modest declines to modest gains. This marks a significant departure from the previous era, when prices rose relentlessly even as home sales stayed low. The necessary conditions are in place for this shift. Inventory has risen for three consecutive years and now sits 15% above last year's levels."
Affordability reached its most challenging level by mid-2022, with housing expenses consuming more than 42% of median household income, well above the 30% sustainable threshold. The 2026 forecast calls for national home prices to be essentially flat, up about 0.5%, with a plausible range spanning modest declines to modest gains. Flat prices combined with rising incomes and moderating mortgage rates will gradually restore affordability. Inventory has risen for three consecutive years and stands about 15% above last year's levels, while buyer activity is strengthening and supply is keeping pace. Pandemic-runup markets are offering renewed buyer opportunities.
Read at www.housingwire.com
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