The U.S. housing market is expected to thrive in 2026

The housing market has spent the past few years stuck with high prices and slow sales. But in 2026, conditions are expected to ease slightly for buyers, a shift Redfin describes as a “reset” year.

That reset is being driven by a growing supply of homes after years of limited inventory, which may push prices down in some markets next year.

Overall, home prices have mostly leveled off over the past two years, as new construction has picked up. And there are already signs the market is loosening: Homes are sitting on the market longer, negotiations are becoming more common, and builders are offering discounts in markets where the supply of newly constructed homes has increased, according to Realtor.com.

That doesn’t mean homes will suddenly become affordable nationwide. Median home prices are still too high for many buyers after rising by 25% since 2020, according to U.S. Census data. Thirty-year fixed mortgage rates are also expected to remain elevated above 6% in 2026, limiting how much relief buyers are likely to see.

In some markets, though, builders are increasingly using price cuts and incentives to move inventory, giving buyers more leverage, even though affordability remains tight overall.

“The bottom line for 2026 is that it will be a transitional year,” Chris Reis, a broker with Compass in Seattle, tells CNBC Make It. “There won’t be a crash or a boom, just the market finding its footing after years of extraordinary disruption. Buyers will have more selection and negotiating power than at any time since the pandemic.”