HousingWire Daily First American’s Odeta Kushi on the 2026 housing forecast
Dec 24, 2025
Odeta Kushi, Deputy Chief Economist at First American, delves into the housing market forecast for 2026. She discusses how recent Fed actions influence mortgage rates and the implications of a softening labor market on housing activity. Kushi introduces a normalization framework to identify market trends and addresses the psychological thresholds affecting buyers and sellers. With wages outpacing home prices, she anticipates gradual affordability improvements. Kushi also highlights risks of rising rates and the potential for more foreclosures amidst strong homeowner equity.
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Hawkish Cut Signals Slower Rate Relief
- The Fed's recent cut felt hawkish and signals fewer rate cuts than markets expect.
- Inflation uncertainty and fiscal boosts make the Fed cautious about loosening policy.
Listings Drive Sales Normalization
- New listings returning to normal strongly correlates with sales normalizing.
- Markets cluster into four quadrants based on listings and sales pace, revealing leaders and laggards.
Expensive Markets Feel Rate Stickiness More
- Higher-priced markets show stronger 'rate stickiness' because moving costs are larger in dollars.
- Price declines are hitting both pandemic darlings and expensive coastal markets.