Housing affordability could make small improvements in 2026

The housing market, struggling with high prices and mortgage rates around 6-7%, may see improvements in 2026 with rates expected to drop to the low-6% range, enhancing affordability for some buyers. Home prices are predicted to rise more slowly due to limited supply and slower new construction caused by high costs and labor shortages. Wage growth slightly outpaces inflation, but challenges remain for younger and lower-income families. Government policy changes could impact the market, but details are uncertain.