"Homebuyers may experience a reprieve in 2026 as price normalization and an increase in home sales over the next year will take some pressure off the market-but don't expect homebuying to be affordable in the short run for Gen Z and young families. The "Great Housing Reset" will start next year, with income growth outpacing home-price growth for a prolonged period for the first time since the Great Recession era, according to a Redfin report released this week."
"The residential real estate brokerage sees mortgage rates in the low-6% range, down from down from the 2025 average of 6.6%; a median home sales price increase of just 1%, down from 2% this year; and monthly housing payments growth that will lag behind wage growth, which will remain steady at 4%. These trends toward increased affordability will likely bring back some house hunters to the market, but many Gen Zers and young families will opt for nontraditional living situations, according to the report."
A major housing reset will begin in 2026 as income growth outpaces home-price growth for a prolonged period for the first time since the Great Recession. Mortgage rates are expected to fall to the low-6% range from a 2025 average of 6.6%. Median home prices are projected to rise just 1% in 2026, down from 2% in the current year. Monthly housing payment growth will lag behind steady wage growth of about 4%, improving affordability pressures. Some buyers will return, yet many Gen Z and young families will favor nontraditional, multigenerational living arrangements. Gen Z homeownership remained near one-quarter in 2024 and millennial ownership about 54.9%, with more adult children moving back in with parents and increases in shared housing expected in 2026.
Read at Fortune
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