If you’re among the many Americans who lament that the pandemic housing boom passed you by, 2026 might finally be your moment.
A new Redfin report predicts that next year will usher in what the company calls “The Great Housing Reset.” Researchers expect a multi-year stretch of slowly rising home sales and improved affordability, as incomes outpace home prices for the first sustained period since the Great Recession.
Redfin forecasts that mortgage rates will gradually decline over the course of 2026 and that, by year’s end, the median home-sale price will be up just 1% from a year earlier. Existing-home sales — the sale of previously owned homes — are expected to climb 3% from 2025, reaching an annualized pace of 4.2 million.
Daryl Fairweather, Redfin’s chief economist, told Business Insider that home sales will pick up as the “rate-lock” effect fades and more homeowners with low mortgage rates finally decide to sell.
“A lot of people bought during the pandemic; there was just a huge surge of activity because of how low rates were,” Fairweather said. “A typical homebuyer stays in their home for 10 years, and we’re five years out from the start of the pandemic. Naturally, we’ll start to see more people be ready to sell homes again — it’s not going to be a drastic change; it’ll just be more of a loosening of the market.”
The market went haywire in the pandemic, but things are finally starting to settle
Over the last few years, the housing market has been strained. It all stems from the COVID-19 pandemic and its ripple effects on the real estate market.
In the early stages of the pandemic, the US government rolled out a massive stimulus package to prop up the economy. That, combined with rock-bottom mortgage rates, inadvertently set off one of the most dramatic homebuying frenzies in US history. Between late 2020 and 2021, a surge in demand drove home prices to record highs, exacerbating the nation’s long-standing housing shortage.
Those pandemic-era dynamics have shaped the market ever since.
Homeownership has felt out of reach for years for many would-be buyers, especially millennials and Gen Zers who have watched mortgage rates climb (and since fall, but not to pandemic lows), starter homes vanish, newly built homes shrink, and the amount of cash needed to buy skyrocket.
By late 2025, though, there are signs the market is easing up. In many cities — even once-red-hot pandemic boomtowns like Austin and Tampa — softer demand has meant homes sit on the market longer, pushing sellers to cut prices and offer more incentives and concessions as buyers regain leverage.
Redfin expects that dynamic, along with gradually declining mortgage rates, to lure more would-be buyers back into the market. Still, researchers warn that even as conditions improve, affordability will remain a major barrier to homeownership for many, especially younger buyers.
“We’re not going to see this wave of people rushing into the market again; we’ll see more of a normalization — more of a return to what the housing market felt like pre-pandemic,” Fairweather said. “It’s still going to be more expensive, but wages have increased considerably since 2018 and 2019, so I think more people will feel like, for their own personal circumstances, it’s finally the right time to buy.”
