B
y 2026, homebuyers may see a brief easing as prices stabilize and sales rise, yet affordability for Gen Z and young families remains limited. Redfin’s latest report signals the start of a “Great Housing Reset” next year, with wages growing faster than home prices for the first time since the Great Recession. Mortgage rates are projected to dip into the low‑6 % range from the 2025 average of 6.6 %, while median price growth is expected to slow to 1 % versus 2 % this year. Monthly housing costs are forecast to lag behind the steady 4 % wage growth, easing pressure on buyers.
These shifts may lure some buyers back, but many younger prospects will opt for alternative arrangements. The report notes a rise in adult children co‑habiting with parents, reflecting a move away from traditional nuclear families. “Imagine a garage converted into a second primary suite for returning adult children,” the authors write, citing agents in Los Angeles and Nashville who report homeowners planning to adapt spaces for extended families.
Homeownership rates for Gen Z and millennials plateaued last year: just over 25 % of Gen Z and 54.9 % of millennials owned homes. In mid‑2025, roughly 6 % of Americans who struggled with housing costs moved back in with parents, and another 6 % shared with roommates—figures that are projected to rise in 2026.
Despite these positive signals, experts warn that income‑price gains alone won’t solve affordability. Real‑estate attorney C. Scott Schwefel reminds buyers that total cost includes mortgage rates, property taxes, and other living expenses. Young voters rank lower housing costs as a priority, yet they confront high sale prices, mortgage rates, insurance premiums, and potential utility hikes driven by a data‑center boom that inflates energy bills. A bipartisan effort is expected to address the crisis, but true affordability for first‑time buyers and young families remains distant.
Sergio Altomare, CEO of Hearthfire Holdings, describes the market as “thawing” rather than frozen. Prices are stabilizing, not surging, and activity that had been stalled for years is beginning to resume.
