Baby Boomers buying more homes than Millennials
Move over, Millennials — Baby Boomers are now leading the way in the housing market. According to the National Association of Realtors, Americans aged 60 to 78 now make up 42% of homebuyers, compared to just 29% for Millennials — despite Millennials being the country’s largest generation.
Fox – 5 NY
A real estate company has released its projections for the hottest United States housing markets in 2026.
The Redfin report published on Dec. 2 anticipates U.S. homebuyers will begin to get some relief in the new year as affordability improves and income growth begins to outpace home-price growth.
“Next year will mark the beginning of a long, slow recovery for the housing market,” Redfin said in the report.
In August, the U.S. Federal Housing Finance Agency reported that U.S. housing prices rose 2.9% year over year and were unchanged quarter over quarter. The housing market has experienced annual appreciation each quarter since 2012, the agency said.
The five U.S. states with the highest annual appreciation were New York, Connecticut, New Jersey, Mississippi and Illinois.
Redfin’s report states that the “Great Housing Reset,” which it expects will occur in 2026, “won’t be a quick price correction.”
“Instead, the Great Housing Reset will be a years-long period of gradual increases in home sales and normalization of prices as affordability gradually improves,” according to the real estate giant.
Here are the projected hottest housing markets for next year, as well as Redfin’s predictions for the U.S. real estate market in 2026.
Projected hottest housing markets for 2026
According to Redfin’s report, the hottest housing markets next year are expected to be:
- New York City suburbs: Long Island, Hudson Valley, Northern New Jersey and Fairfield County, Connecticut
- Syracuse, New York
- Cleveland, Ohio
- St Louis, Missouri
- Minneapolis, Minnesota
- Madison, Wisconsin
Commuters will be attracted to the New York City suburbs, the real estate company predicts. More affordable areas like the Midwest and Great Lakes regions will be attractive to individuals seeking to move from areas at risk of climate-related disasters such as floods and wildfires, according to Redfin’s report.
Recent graduates are likely to move to small and mid-sized cities where they can find affordable rent and begin their careers in the workforce, the real estate company said.
Housing markets most likely to cool down
According to Redfin’s report, the housing markets expected to take a downturn next year are:
- Nashville, Tennessee
- San Antonio, Texas
- Austin, Texas
- Fort Lauderdale, Florida
- West Palm Beach, Florida
- Miami, Florida
Homes in coastal markets such as Florida and Texas will wane due to natural disasters, which are causing many homeowners to shoulder higher insurance costs, Redfin’s report states. Also, remote workers in those states are expected to relocate back to where their offices are located.
Redfin also anticipates the following trends will persist throughout the next year.
Mortgage rates will dip to 6.3% in 2026, Redfin predicts
Redfin predicts mortgage rates will continue to decline but will be relatively high compared to the pandemic era at 6.3% for 2026, down from the 2025 average of 6.6%.
According to Redfin, a weaker labor market will lead the Federal Reserve System to cut interest rates in 2026. The real estate agency also noted that inflation risks may stop the Federal Reserve System from cutting rates further.
Still, rates will occasionally drop below 6%, but homebuyers should not expect them to drop significantly lower, Redfin said.
Home sales will rise 3%, Redfin says
Sales of existing homes will end 2026 up 3% from 2025, according to Redfin.
The spring homebuying season will be hotter compared to 2025, as this year’s rates were about 6.8% during this time. Dropping rates will bring more buyers into the market, according to Redfin. Still, those who have lost, or are fearful of losing their jobs, particularly to artificial intelligence as it continues to replace white-collar positions, will be reluctant to enter the market.
Rents will rise as demand for apartments increases and supply falls
Renters are not expected to see relief in the new year as demand for apartments is anticipated to increase as supply falls, according to Redfin’s report. This will likely lead to rising rents in many metro areas with increased rates of about 2% to 3% by the end of the year, matching the expected pace of inflation, the real estate company said.
Construction on new apartments has slowed down from 2021 to 2022 and is not likely to increase, according to Redfin. Fewer apartments are being built, with added competition for every unit.
As housing prices increase, more people are opting to rent instead of purchasing a home. In South Florida and Southern California, specifically, rental-demand growth is expected to be capped due to tighter immigration policies, according to Redfin’s report.
Michelle Del Rey is a trending news reporter at USA TODAY. Reach her at mdelrey@usatoday.com
