Washington DC Area Housing Market Predictions for 2026

Earlier this week, Redfin declared that The Great Housing Reset will take shape in 2026. Instead of a year of recession, they described next year as a period of gradually increasing home sales and prices. Here are some of their predictions:

Prediction 1: Mortgage Rates Will Dip to Low-6% Range. A weaker labor market will lead the Fed to cut interest rates in 2026 and bring monetary policy to a more neutral place, which should keep mortgage rates in the low-6% range.

Prediction 2: Wages Will Grow Faster Than Prices. Redfin expects the median home sale price to rise by only 1% year-over-year. This means that prices will grow slower than wages for a sustained period since the aftermath of the 2008-2009 financial crisis.

Prediction 3: Some buyers will opt for non-traditional living situations. This is because homebuying will still be out of reach for many 2026 buyers, including Gen Zers in their 20s and young families. This will continue to boost the popularity of multigenerational homes and ADUs.

Prediction 4: Existing Home Sales Will Rise 3%. Redfin believes that sales for 2026 will add up to an annualized rate of 4.2 million, as mortgage rates are expected to be lower than 2025's numbers.

Prediction 5: Affordability Crisis Will Unite Policymakers. Recent elections made it clear that lower housing costs are a priority for many, especially younger voters. Redfin predicts that a national housing emergency may be declared next year, together with bipartisan efforts to make homes more affordable.

Do you think these predictions will materialize? If you’re planning to buy or sell real estate in the DC Area in 2026, reach out to chat about what implications these predictions may have on your plans. Consultations are always free!