On The Market

2026 Home Price Predictions: Will the Correction Continue?

22 snips
Jan 1, 2026
The housing market is at a crossroads as 2026 predictions loom. With affordability at a 40-year low, many Americans are locked out of home ownership. Dave discusses the potential for home prices to stabilize or decline, while an unexpected 'X factor' could shift the market dynamics. He shares his investment strategy focused on rental properties and emphasizes the importance of cash flow over appreciation in uncertain times. Will the correction continue, or is a market rebound on the horizon? Tune in to find out!
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INSIGHT

Affordability Is The Market's Key Variable

  • Affordability is the single biggest driver of the housing market today.
  • It depends on three variables: home prices, mortgage rates, and wages.
INSIGHT

Base Case: Flat To Slightly Down Prices

  • Dave's base case for 2026 is flat to modestly down nominal home prices.
  • He forecasts a range of -4% to +2% and personally leans toward -1% to -2%.
INSIGHT

Real Prices Are Likely To Decline

  • Real (inflation-adjusted) home prices are very likely to fall in 2026.
  • Even modest nominal gains would still mean negative real returns if inflation stays around 3%.
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