Industry Watchers Hope for Housing Market Recovery Next Year

The housing market struggled this year, but investors and industry executives are growing increasingly hopeful about 2026.

2026 could mark the start of what is being called the "Great Housing Reset."

Economists at real estate information firm Redfin said 2026 could mark the start of what it calls the “Great Housing Reset,” an era of gradual increases in home sales and price normalization, Paul R. LaMonica and Janet H. Cho reported for Barron's Daily.

After three Federal Reserve interest rate cuts, including last week’s move, mortgage rates have fallen to 6.2% from a January peak of roughly 7% for a 30-year fixed-rate loan.

Expectations are they could drop further.

Builders Hovnanian and Toll Brothers issued conservative forecasts in their recent earnings reports, reflecting lingering caution.

Hovnanian CEO Ara Hovnanian said buyers are exploring the market but hesitating due to economic uncertainty, adding, “That will eventually pass.”

Toll Brothers CEO Douglas Yearley described his company’s outlook as conservative, despite lower mortgage rates and strong underlying demand, fueled by favorable demographics and tight housing supply.

Darius Dale, CEO of 42 Macro, said political efforts to support housing ahead of midterm elections benefit builders, suppliers, and retailers like Home Depot and Lowe’s.

Laffer Tengler Investments CEO Nancy Tengler expects regulatory relief via first-time homebuyer tax credits or incentives for builders to boost supply.