Redfin predicts “Great Housing Reset” of 2026

Great opportunity for our readers

When we look back at why we joined Million Dollar Listing all those years ago, it came down to one simple reason–reach. Television could give us exposure like we never had before… and it certainly did!

Well, the world has changed a lot since then. Now everyone has the power to reach millions of people, and it’s all through the power of social media.

But if you’ve tried building your digital presence on your own, you probably wished you had a little help.

That’s where our partners at Estate Media come in.

They created the wonderful Agent Growth Program to simplify the process. The program is specifically designed for agents and brokerages who want to take their social media game to the next level.

They make it easy. You film in short sessions, and their team handles everything else from there–scripting, editing, posting, and performance tracking. 

And here’s good news. We’ve arranged for our Blueprint readers to get a free social media audit. You can schedule a free consultation where they will look over your social media portfolio.  

We hope you will take advantage of this terrific opportunity!

- James and David

The “Great Housing Reset” of 2026

According to Redfin’s forecast, 2026 will be the year of the “great housing reset.” As the company’s Chief Economist, Daryl Fairweather, tweeted, “It won’t be a crash, and it won’t be a boom. It is the beginning of a long, slow recovery where the math finally starts to change.” 

In the coming weeks, we will cover all 11 of Redfin’s predictions, but for now, we want to highlight three critical ones:

1. Mortgage rates will dip to the low-6% range – Redfin predicts the 30-year fixed rate will average 6.3% for the entirety of 2026, down from its 2025 average of 6.6%. 

2. Wages will grow faster than prices, improving homebuying affordability – Redfin projects that U.S. home-sale prices will rise 1% year over year in 2026. However, homebuying will become more affordable because home prices will grow more slowly than wages for the first time since the aftermath of the financial crisis. The small price increase, combined with mortgage rates dipping lower than they were in 2025, means monthly housing payments will grow more slowly than wages, too.

3. Home sales will rise 3% – Redfin predicts that sales of existing homes in 2026 will be up 3% year-over-year, with sales coming in at an annualized rate of 4.2 million. Redfin expects a stronger spring homebuying season in 2026 because mortgage rates were sitting around 6.8% during the spring of 2025, meaningfully higher than the 6.3% rates we’re predicting this year.

Our take

If Redfin is right, then 2026 will be the year the market quietly pivots. It won’t be a surge or a slump, but a gradual rebalancing that rewards buyers who’ve been waiting on the sidelines. Lower mortgage rates and slower price growth won’t create a wave of affordability, but they will reopen doors that have been shut for years. The more important shift is psychological: as wages begin to outpace home prices, confidence will start to rebuild. That’s what fuels the early stages of a recovery. Agents who understand this inflection point can help clients navigate a market defined by small-but-meaningful gains. This will give them an edge long before the broader public realizes the reset is already underway.

New homes are surprisingly affordable

The price gap between new and existing homes has narrowed to a record low, with new builds now only 10.2% more expensive than existing homes. Builders are using pricing and financing incentives to entice buyers back into the market. In Q3 2025, an all-time high of 15.1% of new homes saw price cuts.

The trend is most pronounced in the South and West, and represents an affordability opening that many buyers don’t yet recognize. Here’s more about this trend:

• Builder incentives are driving significantly lower mortgage rates – New-home buyers secured average rates of 5.27% versus 6.26% for existing homes, a 99-basis-point advantage. Smaller down payments (15.7% vs. 17.8%) and near-identical monthly payments—only about $30 more—further boost affordability, especially given new homes’ lower maintenance and energy savings.

• Prices are flattening as competition from existing homes increases – New home prices rose just 0.2% year over year, while resale prices climbed 1.6%. With new construction’s share of listings falling from a 22.4% peak in 2023 to 16.7% today, builders are adjusting quickly with more cuts and incentives, putting new and existing homes in direct price competition.

• Affordability varies dramatically by locality and region – The South and West see minimal premiums thanks to strong supply, giving buyers more leverage. But in the Midwest (55.8% premium) and Northeast (61.6% premium), limited inventory keeps new construction a premium product. Even within regions, affordability can shift by county or neighborhood, making local comparisons essential

Our take

New construction is becoming one of the quietest affordability advantages in the market. With price premiums shrinking and builders offering rates nearly a full point below the resale market, buyers who think they’re priced out may actually qualify today. But these trends are highly local. Some markets are seeing near-parity with existing homes, while others still treat new builds as premium products. The opportunity goes to agents who compare both options side by side and show buyers where new construction creates real leverage.

Markets expected to see the biggest growth

Realtor.com expects active listings to rise 8.9% year over year in 2026, marking the third consecutive annual increase. By year’s end, inventory is projected to be only 12% below pre-2020 norms, an improvement from a 19% shortfall in 2025 and a nearly 30% shortfall in 2024.

Existing-home sales are also set to tick up 1.7% to 4.13 million. While that’s still well under the 2013–2019 average of 5.28 million, it represents a modest step toward a more balanced market.

Here are the metros expected to see the biggest jump in home sales and price growth in 2026:

Our take

Realtor.com’s 2026 outlook shows a market moving toward balance. But the real opportunities are at the local level. The strongest sales and price growth are concentrated in affordable Northeast and Midwest metros – Toledo, Syracuse, Worcester, and Rochester – where buyers can finally move again, and inventory gains actually translate into activity. National conditions may be improving slowly, but next year’s momentum will be in markets that stayed reasonably priced and are now catching a second wind.

When we decided to join Million Dollar Listing, it was all about reach. We knew the kind of clients TV exposure could bring. Today, social media has that same power. That’s why our partners at Estate Media created the Agent Growth Program specifically for agents and brokerages who want to elevate their social presence to the next level. You film in short sessions, and their team handles everything else: scripting, editing, posting, and performance tracking. The Blueprint readers get a free social media audit.

Schematics

The news that just missed the cuts

• Use these scripts to up your real estate agent game in 2026

• Trends to expect in luxury real estate next year 

• Why there are so many teardowns in the Northeast

• Commercial real estate is getting too cheap to ignore

• Josh Flagg flips home on Miami’s “richest road”

Foundation Plans

Advice from James and David to win the day

We just dropped a special edition of our podcast Rise Above the Ranks just dropped. It’s a conversation with Clayton Collins, CEO of HousingWire. We take a deep dive into Compass’ recent expansion and the strategy behind the growth. Is this a bold play for market dominance, a survival strategy in a shifting industry, or a smart way to boost agent count, energy, and revenue?  

We break down what Compass’s move means for agents, brokers, and investors. Here are some of the themes we cover:

1. Scale is now a strategic weapon – Compass’s expansion to 340,000 agents across 120 countries is a calculated effort to make its technology investments more profitable and more powerful. A larger network amplifies the impact of private exclusives and brings margin to their AI and software tools. For agents, this signals a shift toward brokerages competing on the strength of platforms, not just splits and branding.

2. Private marketplaces get more powerful with scale – Some people say that off-market listings limit exposure, but a 340,000-agent ecosystem changes that equation. Now, Compass is aiming to create a true internal marketplace with meaningful reach. This will pressure competitors and force independents to articulate what exposure really means in their model.

3. The industry response shows deep fragmentation and opportunity – Some see Compass’s move as a threat, others see a chance to poach talent, and others see it as validation that tech-driven scale is the new frontier. Agents should pay attention—these reactions reveal where each brokerage thinks the market is going.

4. Agents must act like CEOs, not employees, when making brokerage decisions – Agents are 1099 contractors, responsible for their own business strategy. While this deal will spark movement across the industry, switching brokerages should not be a 24-hour reaction. Your choice should reflect your long-term business model—your lead sources, your market positioning, your tech needs, and your client experience. This is a moment to evaluate platforms the way a CEO evaluates tools, costs, and competitive advantage.

Whether you’re in the business or just fascinated by the inner workings of top brokerages, we really believe this episode is a must-watch. We hope you feel the same way.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“Without commitment, you’ll never start. But more importantly, without consistency, you’ll never finish.” — Denzel Washington

Take some time to regroup and focus this weekend, friends. Time is relentless; it won’t wait for any of us. So, don’t get distracted. Stay ruthlessly focused on your goals. You don’t need to be perfect, just consistent. Small, steady improvements will carry you farther than you think.

- James and David