Under the pressure of high housing prices and high mortgage rates, the housing market in the United States has been experiencing a continued slump in 2025, with weak buying interest and declining sales in some areas. In November, real estate website Zillow released a report stating that over half of the homes in the United States saw a decrease in their estimated values in 2025. However, the latest reports predict that 2026 may be a turning point for the housing market, with some areas potentially seeing a warming trend.
On December 2nd (Tuesday), Redfin predicted that next year’s housing market could witness a “Great Housing Reset” as incomes rise, mortgage rates fall, and legislators may intervene. Some markets may become hotter than others as a result.
On December 3rd (Wednesday), Realtor.com unveiled its 2026 forecast report indicating improvements in the buyer’s market. However, the recovery is expected to be slow, with existing home sales remaining significantly below normal levels due to political and economic uncertainties.
Redfin believes that the suburbs around New York City could see an uptick in the housing market, including Long Island, the Hudson Valley, Northwestern New Jersey, and Fairfield County, Connecticut. Similarly, Syracuse, New York is also expected to attract attention.
Furthermore, Midwestern cities that have shown strong performance in recent years are projected to lead the way again in 2026, including Cleveland, Ohio; St. Louis, Missouri; Minneapolis, Minnesota; and Madison, Wisconsin.
Realtor.com anticipates significant sales growth in several cities in the Northeast, such as Worcester, Massachusetts; Harrisburg, Pennsylvania; Hartford, Connecticut; the Providence-Warwick area spanning Rhode Island and Massachusetts; and Rochester, New York.
Additionally, multiple cities are likely to experience a robust increase in median home prices. Realtor.com estimates that Toledo, Ohio; Scranton, Pennsylvania; Rochester, New York; Hartford, Connecticut; Baltimore, Maryland; New Haven, Connecticut; and Albany, New York could see a rise of about 10% in their median home prices in 2026.
Both Redfin and Realtor.com predict a cooling trend in the real estate markets of major southern metropolitan areas.
Redfin specifically points out that next year, cities like Nashville, Tennessee; San Antonio and Austin, Texas; and Fort Lauderdale, West Palm Beach, and Miami, Florida could face a significant cooling in their housing markets.
Realtor.com forecasts that Miami will see the largest decline in sales volume in 2026, with other anticipated declines in Florida cities including Orlando, Jacksonville, Daytona Beach, as well as Greensboro, North Carolina; Greenville and Charleston, South Carolina.
Moreover, even though the surrounding markets may heat up, sales volumes in the Allentown, Pennsylvania and the Kiryas Joel-Poughkeepsie-Newburgh metropolitan areas of New York are expected to decline.
Realtor.com predicts that housing prices will drop in multiple cities in Florida and California next year, including Cape Coral, Sarasota, Tampa, Daytona Beach in Florida, as well as Stockton, Sacramento, and San Francisco in California.
Recently, Zillow classified cities like Miami, Tampa, Nashville, Austin, and San Antonio as buyer’s markets.
Freddie Mac, the mortgage agency, announced last week that the average 30-year fixed-rate mortgage had dropped to 6.23%, ending a three-week streak of increases. The average 15-year fixed-rate mortgage also decreased to 5.51%, below the previous week’s 5.54% and lower than 6.10% a year ago.
The decline in mortgage rates has boosted buyers’ purchasing power, with statistics showing that U.S. existing home sales saw year-on-year growth for the fourth consecutive month in October.
However, despite the years of soaring home prices, affordability remains a major challenge for American households. Coupled with uncertain economic and job market prospects, many potential buyers are still on the sidelines.
Chief Economist Danielle Hale of Realtor.com stated in a report on Wednesday, “The path to returning to historically affordable levels will be gradual, but 2026 has taken a solid step in the right direction. For buyers who have struggled with limited choices and fierce competition for years, even though the market has not fully recovered, more options and lower costs may change the landscape.”
(Note: This article is for informational purposes only. Epoch Times does not provide investment, tax, legal, financial planning, real estate planning, or other personal financial advice. For specific investment matters, please consult your financial advisor. Epoch Times does not assume any investment responsibility.)
(This article referenced reporting from The Hill.)