The predictions for the 2026 housing market started rolling in when the calendar rolled over, which is what story editors do. We’re not immune, but we’ll give you a take that is not filtered through the prevailing optimistic lens that afflicts real estate analysts.

Leading economists are saying that the housing market is showing signs of rebounding into a more rebalanced state this year, according to a survey by the National Association of Realtors.

But predictions are just opinions wearing a nicer outfit and real estate predictions tend to cluster around whatever just happened. These predictions often come with a lot more confidence than evidence.

We’re going to offer our insights, which do not necessarily follow the conventional wisdom.

Rates are unlikely to move down meaningfully without a major crash or recession. Kalshi puts those odds at 22%, Moody's put it as a 42% risk, and Bloomberg's odds are about 30%. 

Historically, mortgage rates hover in the 6-7% range and mortgage rates will likely stay in this 6-7% range throughout 2026.(We’d like to emphasize that a 6.5% 30-year mortgage is not a high rate. The reality is that anything below 4% is historically low, and we may need anything like those again in our lifetimes.

This year will differ from last year with one exception: acceptance. People will finally need to accept the reality that rates aren’t going back to pandemic levels. One economist for NAR, after pointing out that a combination of elevated rates and higher prices have fostered an affordability crisis, offered an upbeat assessment about how rates falling to 6% would open up a large pool of new buyers. 

But that 500,000 increase doesn’t push the US market to pre-pandemic norms. In 2025, projections put home sales at 4.1 million. If we see an additional half million homes sales this, that would put 2026 at 4.6 million, which is significantly lower than 2019’s pre-pandemic level of 5.3 million. In fact, 2025 homes changed hands at the lowest level since the 1990’s.  

This means prices aren’t likely to appreciate in 2026. At the same time, inventory is increasing and this will likely pull pricing down. 

One of the major trends for 2025 was an increase in inventory to pre-pandemic levels in 12 metro markets. This will continue for 2026. 

All of these predictions focus on the national level. And in real estate, there’s no such thing as a national market. 

One of the darlings of the pandemic price run-up was Austin, where median home prices jumped from about $490,000 in 2019 to a peak of $676,000 in May of 2022, an increase of nearly 40 percent. The median price in 2025 returned to 2019 levels, which is not good news for those who bought on the run-up.

“Basically in Austin you’ve wiped out any of the covid gains, and this is across all property types, houses, condos, etc.” said Wade Shoop, an Austin native with 20 years of experience selling real estate in his hometown. “People who owned before Covid are OK.” 

“Those who bought in the last three to four years are upside down,” he added.

There are a number of factors creating headwinds in Austin, Shoop said, including: the loss of high-paying tech jobs, increased insurance costs from natural disasters, a liberal city council that has added to the tax burden.

Finding a deal in Austin is tough sledding these days.

“You’re just looking for the needle in the haystack, right property, right area, and does not need too much rehab,” Shoop said. “Because there are so many listings on the market right now that are overpriced, with sellers with unrealistic expectations.” 

He does not expect much to change in the coming year, and until the technology companies bring back the high-salaried workers who can afford the prices, the standoff between buyers and sellers will likely continue.

“Same song, second verse from last year,” Shoop said. “I think we’re bouncing along the bottom with prices. I don’t think we’re going to see significant increases, or significant decreases.”

The chart below focuses on the hottest markets from the pandemic and how those markets look November 2025 vs. a year ago. 

Nashville specifically shows 3,400 homes listed as of this writing, with 940 of those are listed as new construction. Some newly built townhomes are in the $200,000 range with an estimated cost per month of $1,300, and monthly rents are about $1,800. So Nashville is one example where investors could look for immediate cash flow.

There are others, and we’ll highlight them in the coming weeks and months. 

Cape Coral, Florida, saw the largest price declines in 2025. This year could be the time to start looking, however, this city is built on the largest canal system and prone to flooding so the long-term outlook is not favorable. Housing markets in many parts of Florida are a risky bet, as the state is facing an unprecedented homeowners insurance market failure. 

The housing market is experiencing the steepest price discounts in at least eight years, according to a Zillow analysis of October 2025 data. The record price cuts amounted to $25,000 on a typical U.S. listing, another that the market is shifting to buyers. Sellers have been making multiple cuts to attract buyers, especially in markets where inventory has surged and homes are taking longer to sell. Coastal markets saw the biggest price cuts, led by  San Jose ($70,900), Los Angeles ($61,000), San Francisco ($59,001), San Diego ($50,000) and the New York metro area ($50,000). Meanwhile, in Oklahoma City and Louisville, where homes are selling more quickly, the typical price cut in October was $15,000. 

Nearly 93% of American homeowners are worried that extreme weather caused by the changing climate will damage their homes over the next three years — and almost half are considering moving this year because of their concerns about warming, according to the Homeownership Trends Report conducted by Kin, a digital home insurance and finance provider. The impact of climate change is one of the drivers of higher home insurance costs — the average premium increased by 24% between 2021 and 2024, and some 82% of American homeowners expect their premiums to increase in 2026. (A word of caution here: the sample size was small, only 1,000 homeowners, and we don’t know the quality of the survey firm conducting the research.)

Lest prop.text readers think we are obsessed with ghost towns, we promise this will be the last reference to one for a while. But a headline like the one we saw in Texas Monthly, “A Trip on Magic Mushrooms Inspired a Couple to Revitalize a Route 66 Ghost Town,” is just too irresistible. The story details the revitalization of Glenrio, an abandoned town on the Texas–New Mexico border seventy miles west of Amarillo on Route 66. It’s a love story, starring Gabi Tuschak, an Austin-based hypnotherapist and Erik Spain, a farmer in Olton, who matched on a dating app back in 2021. Spain was inspired by a vision he had while on magic mushrooms a month before he met Tuschak: “I saw a desertscape. And someone important was standing with me.” These days the two are running a cannabis dispensary, the first new business in the former ghost town in decades, on the New Mexican side of the border, where weed is legal. “It’s great,” Tuschak says. “We get cowboys and ranchers. Horse trailers parked in the lot. We get road trippers. We get Europeans, because Route 66 is huge in the international community.”

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