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housing market predictions 2026

Housing forecasts get attention in proportion to how dramatic they are, which is precisely backwards from how useful they are. The honest summary of the current market is that it is frozen rather than falling: fewer people are moving, prices are drifting rather than collapsing, and the mechanisms that would normally clear a market — sellers cutting, buyers stepping in — are both being suppressed by the same variable.

• A sustained fall in mortgage rates large enough to narrow the gap between existing and new financing — the single most powerful unlock, and the one least under any policymaker's direct control.
• Life events that override financial logic: births, divorces, job relocations and retirements, which accumulate steadily and eventually force movement regardless of rates.
• A meaningful increase in new construction, which adds supply without requiring an existing owner to sell.
• A labour market deterioration severe enough to force distressed selling — the scenario crash forecasts implicitly assume, and the one current employment data does not support.