A Market in Flux: Redfin’s Forecast for a U.S. Housing Recalibration

The U.S. residential real estate sector is navigating a complex period of adjustment, characterized by shifting investor behavior and conflicting market indicators. In response to these dynamics, the online brokerage Redfin has introduced the concept of a "Great Housing Reset" anticipated for 2026. What do these divergent signals imply for the broader market and for Redfin's own operations?

Current housing data presents a mosaic of contrasting trends. While buyer demand appears to be softening, price metrics tell a different story. For the four-week period ending November 30, 2025, the count of pending home sales declined by 2.6% year-over-year, marking the most significant drop in eight months. Concurrently, the growth in housing inventory is losing momentum, with active listings rising by just 5.1% annually—the smallest increase in nearly two years. New listings saw a negligible uptick of 0.9%.

Despite these signs of cooling demand, the median U.S. home sale price achieved a new record high of $400,125, a 1.4% increase. Properties, however, are selling for an average of 6% below their initial list price. The typical home now remains on the market for approximately 50 days, a week longer than the previous year. As of December 4, the average rate for a 30-year fixed mortgage stood at 6.19%.

Investor Activity Cools as Profitability Shrinks

The retreat of institutional buyers is a notable feature of the current landscape. Investor purchases of homes saw only a marginal annual increase of 1% in Q3 2025, totaling roughly 52,000 units. Their share of all homes sold remained steady at 17%.

Should investors sell immediately? Or is it worth buying Redfin?

More telling is the erosion of investor returns. During the same quarter, 8% of homes sold by investors were disposed of at a loss—the highest level in over two years. The average capital gain realized from a sale decreased by about 1% to $182,688. This signals a definitive end to the double-digit returns that were commonplace in 2020 and 2021.

Redfin's 2026 Outlook: The "Great Reset"

Looking ahead, Redfin projects that 2026 will usher in a phase termed the "Great Housing Reset." The company's forecast includes only a modest 1% home price appreciation. Mortgage rates are expected to average 6.3% for the year, with periods where they dip below the 6% threshold. Existing home sales could rise by 3% to an annualized rate of 4.2 million.

A potential pivotal shift would be wages growing at a faster pace than home prices—a phenomenon not observed since the 2008 financial crisis. Such a development could boost refinancing volume by more than 30%. Nevertheless, Redfin does not anticipate that affordability will improve sufficiently to restore traditional pathways to homeownership for younger generations in the near term.