Homebuyers in the United States may see some relief in 2026 as price normalization and rising home sales ease pressure on the housing market, according to a new report by Redfin.
However, experts warn that affordable housing will remain out of reach for many young Americans, especially Gen Z and young families.
The Redfin report, released this week, forecasts a “Great Housing Reset” beginning next year, with income growth expected to outpace home-price growth for the first time since the Great Recession.
Analysts project mortgage rates will fall to the low-6% range from the 2025 average of 6.6%, while median home price growth slows to 1%, down from 2% this year.
Monthly housing payments are also expected to grow slower than wages, which are forecasted to increase at a steady 4%.
Despite these improvements, Redfin predicts that many Gen Z and millennial buyers will continue to struggle with homeownership. Only about 25% of Gen Zers owned a home in 2024, while 54.9% of millennials were homeowners, with little improvement expected in the near term.
The report notes a growing trend of adult children living with their parents or in nontraditional living arrangements due to ongoing affordability challenges. “Redfin agents in cities like Los Angeles and Nashville report more homeowners are converting garages or spare rooms into living spaces for extended family,” the report states.
Real estate attorney C. Scott Schwefel emphasized that affordability is more than just a comparison of income and home prices.
“Prospective buyers need to consider the full cost of living, including property taxes, mortgage rates, and utilities,” he said. Schwefel noted that unless these factors stabilize, many households may not experience meaningful relief.
While the housing market is shifting from “frozen to thawing,” experts caution that first-time buyers and young families may still face significant barriers.
Sergio Altomare, CEO of Hearthfire Holdings, said, “Prices aren’t surging, but they’re no longer falling. We are beginning to unlock some activity that’s been trapped for a couple of years.”
As home affordability remains a top concern for voters, policymakers are expected to pursue bipartisan solutions to address rising housing costs, though a fully accessible market for young buyers may still be years away.
