Real Estate Rookie Redfin: The Great Housing Market “Reset” Starts in 2026
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Dec 24, 2025 In this discussion, Chen Zhao, head of economic research at Redfin, shares insights on the impending housing market reset slated for 2026. She unveils 11 predictions, highlighting improving affordability and modest price growth fueled by rising wages. Chen explores mortgage rates likely stabilizing in the low sixes and the potential for rental demand to pick up. With AI poised to revolutionize property searches and climate risks influencing decisions, her analysis offers a glimpse into a changing real estate landscape.
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The Great Housing Reset Begins
- Redfin forecasts 2026 as the start of a long, slow housing-market reset rather than a sharp crash or boom.
- Affordability should slowly improve as mortgage rates settle and prices normalize against wages.
Rates Likely Stuck In Low Sixes
- Mortgage rates likely stay in the low sixes, with no sustained return to the fives or rise back to seven percent.
- The Fed's balancing act and the upcoming chair transition make large rate moves unlikely in the near term.
Price Growth Slows; Large Crash Unlikely
- Home-price growth has already slowed and is likely to remain low as the market shifts toward buyers.
- Prices probably won't crash sharply because many owners can delist or rent rather than sell at a loss.