American Real Estate Association founder Jason Haber breaks down the state of the housing market and examines Redfin’s announcement of a ‘great real estate reset’ coming in 2026 on ‘The Claman Countdown.’
The U.S. housing market is moving in the right direction, but potential buyers won’t get much relief in 2026, according to industry experts.
Realtor.com chief economist Hannah Jones predicted that inventory will continue to rise and mortgage rates will drop slightly to 6.3%. While not a significant decline, it’s still down from the 6.6% estimate in 2025, highlighting how the market is getting “slightly profitable for consumers.”
Jones was quick to downplay expectations, saying the market is not expected to “turn a big corner in 2026.”
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As home prices slowly decline, mortgage payments will fall in line, but only by about 1.3%, according to Jones. That change may not be visible, but Jones said it’s still a step in the right direction.
As home prices slowly decline, mortgage payments will decrease accordingly, according to real estate experts. (Aaron Schwartz/Xinhua)
The US housing market is still struggling to recover from years of turmoil since the COVID-19 pandemic. During the boom, bidding wars sent prices soaring to record highs. Meanwhile, the dramatic increase in mortgage rates that followed made monthly payments more painful for homeowners. Many potential buyers who were locked in at very low prices before they went up decided to stay put, which restricts supply and keeps prices rising even when demand is low.
Today, with mortgage rates falling and property improving in some regions, the cost of buying a home remains out of reach for many families.
The unaffordability crisis in the US housing market is putting home buying out of reach for many Americans. (Nathan Howard/Bloomberg)
There are still many buyers who do not want to give up their low prices. Recent statistics from Realtor.com show that 52.5% of mortgages are under 4%, 70% are under 5%, and 80% are at 6%, Jones said.
Fortunately, even with small changes in lending rates, Jones said there will be more movement in the market compared to two years ago. However, most of these moves will be for families who need to move out of necessity.
There won’t be any movement, but in areas where housing prices are more favorable, such as the West and South, Jones predicted that more families will move up.
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Home prices, Jones predicted, will be more or less the same by 2025. At the national level, home prices are estimated to increase by about 2% by 2026.
“However, the picture is very, very different when you’re talking about the South and West versus the Northeast and Midwest,” Jones said.
There are still many buyers who do not want to give up their low mortgage rates. (Marco Bello/Reuters)
For example, inventory is up to 50% above pre-pandemic levels in the South and West, causing softening of home prices across many metros in those parts of the country. Jones expects downward pressure on prices in those areas to continue as “new construction continues to come through the pipeline.”
On the other hand, Jones indicated that there will still be upward pressure on prices in those strong markets in the Midwest and Northeast, where inventory levels are between 30% and 50% below pre-pandemic levels.
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“The Midwest and the Northeast haven’t seen that new construction that the South and the West have done over the last five years. And so that just reduces their ability to recover and it’s led to a lot of people thinking about … moving to different areas just to find a house to buy,” Jones said.
That flurry of new construction is what helped the South and West markets recover.
