Redfin Predicts a ‘Reset’ in 2026

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Redfin, Seattle, predicts a “Great Housing Reset” will begin in 2026–a phenomenon it defines as a “yearslong period of gradual increases in home sales and normalization of prices as affordability gradually improves.”

The firm outlined a number of predictions for what we’ll see next year, but cautioned it won’t be quite enough to make homebuying affordable in the short run.

Among those predictions: Mortgage rates will continue to fall, but run above pandemic norms. Redfin forecasted the 30-year fixed rate will average 6.3% next year, down from the 2025 average of 6.6%.

The report predicts the median U.S. home-sale price will only rise 1% year-over-year in 2026–running behind average wage growth and therefore rendering homes more affordable.

Sales will increase, Redfin predicts, up 3% from 2025. That would lead to sales at an annualized rate of 4.2 million, up from 4.1 million annually in 2023-2025.

Younger Americans will still struggle to afford homeownership. Gen Z and millennial homeownership rates were flat in 2024, and Redfin anticipates that trend will continue. As a result, younger Americans will continue to live with parents or roommates, and non-nuclear-family groups may pool resources to purchase homes.

The report also posits that more Americans will refinance–estimated to increase by more than 30% annually in 2026 and ending the year at $670 billion. And, more homeowners will tap home equity to fund renovations, via a HELOC or cash-out refinance.

By market, Redfin predicts the New York suburbs will be hot, attracting those who need to commute to the office. The Midwest and Great Lakes region areas will also be popular. But, home sales in coastal Florida and Texas may languish amid rising insurance costs and a move away from remote work.

Rents will rise; Redfin predicts by about 2-3% by the end of the year. Demand will increase as supply falls following the pandemic apartment-building boom.