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 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.
More adult children will be living with their parents, as households continue to shift further away from a nuclear family structure, Redfin predicted.
