Redfin is painting a fairly rosy picture for the real estate market next year, though not as rosy as some.
The brokerage released its forecast for 2026 on Tuesday. In it, the company’s economists made predictions for home sales, price growth, shifts in the broader economy and more.
The takeaway? Some improvement across the board in various factors that make a home purchase more affordable for buyers. But even a “great housing reset” won’t be enough to create a big bump in home sales, according to the forecast.
Redfin economists expect 4.2 million existing home sales next year, up about 3 percent over the past three straight years. That is far less bullish than a forecast made last month by the National Association of Realtors, whose economists expect to see a 14 percent increase in existing home sales next year.
“Sales will increase only slightly because affordability will improve just enough to lure some on-the-fence buyers,” Redfin said. “Many house hunters will remain priced out and/or limited by a stalled labor market, including some Americans who have lost their job — or fear losing their job — as AI takes a toll on the white-collar workforce.”
The brokerage predicts that home prices will grow just 1 percent next year, the lowest rate since 2011. That should help with affordability if the team’s wage growth — 4 percent next year — and home price growth predictions hold true.
Redfin’s economists believe 30-year mortgage rates will average 6.3 percent for the whole year, down slightly from 2025. The lower anticipated rate should lead to a 30 percent increase in refinancing volume next year, Redfin’s economists said, and more homeowners are expected to tap into their existing home equity to pay for home renovations in 2026.
The company expects portions of the Northeast and Midwest to remain hot next year, while calling for a cooldown in markets across the Sun Belt.
