As we head toward 2026, a specific shift is dominating the conversation among economists and housing analysts. It’s being called The Great Housing Reset. This term, recently highlighted in national outlooks like Redfin’s, represents one of the most grounded and realistic takes on the market we have seen in years.

This isn’t a forecast of a crash or another wild boom. Instead, it’s about the market finally “exhaling” after years of intense pressure.

The Big Picture: Income vs. Price Growth

For the first time in over a decade, income growth is expected to outpace home price growth. * Projected Wages: Rising ~4%

  • Projected Home Prices: Rising ~1% to 2%

This is a critical turning point. Affordability improves when paychecks grow faster than housing costs. While the recovery will be gradual, the gap between what people earn and what homes cost is finally starting to narrow rather than stretch further apart.

Key 2026 Housing Predictions

1. Mortgage Rates Thirty-year fixed rates are projected to average around 6.3%. While we might see occasional dips below the 6% mark, the consensus is that they will stabilize in the low 6s—a improvement over much of 2025.

2. Home Prices Expect stability over volatility. Nationally, prices are forecasted to rise only about 1% year-over-year, allowing buyers a rare moment of price predictability.

3. Refinancing Activity This is expected to be one of the biggest movers of the year. Refinances are projected to jump over 30% as homeowners who bought during the rate peaks of the last two years look for opportunities to lower their monthly payments.

4. Inventory & Sales Existing home sales are projected to increase by about 3%. While inventory is slowly building—giving buyers more negotiating power—there is no “flood” of listings on the horizon. Most sellers have strong equity and are under no pressure to move, keeping the supply-demand balance steady.

What This Means For You

If You Are a Buyer

The 2026 environment favors the prepared. Affordability is returning slowly, but leverage is shifting back toward you. For renters who have been waiting on the sidelines, 2026 may finally be the year the market feels approachable again. Getting pre-approved and understanding your buying power now will be your greatest asset.

If You Are a Seller

Strategy is more important than ever. As inventory ticks up, you will face more competition than in years past. Proper pricing, professional presentation, and timing are the keys to success. Listing early in 2026 could position you perfectly in front of motivated buyers re-entering the market with fresh intent.

The Bottom Line: From “Frozen” to “Stirring”

The overall vibe for 2026 is one of steady progress. We are moving away from a frozen market into one that is actively stirring. There is no frenzy and no panic—just a return to a healthier, more balanced rhythm.

My Take: I appreciate this outlook because it offers optimism without the hype. It suggests progress without promising miracles. Whether you are a first-time buyer or a long-term owner, a balanced market is always a healthier environment for everyone involved.

Curious about how the “Great Reset” will specifically impact your neighborhood? Reach out today for a localized equity report or a custom buying strategy for the new year.