First American’s 2026 Outlook
Odeta Kushi, deputy chief economist at First American Financial Corporation gives her insight into where she sees the 2026 housing market heading. She acknowledges that in her 2025 outlook, the market would not be perfect. This forecast was spot on. While mortgage rates eased and affordability improved, it still leads much room for growth.
Her biggest points looking into 2026 include affordability will see steadily improvement, sales activities will be boosted from life events. “Even if mortgage rates stay in the low-6 percent range, weddings and separations, growing families, job moves, caregiving, and downsizing will continue to drive sales activity,” said Kushi
However she still calls to expect regional variations. Looking at places like Austin, and Tampa, the market, “Saw outsized price gains during the boom, then faced slower in-migration and higher rates, which made prices feel stretched relative to local incomes,” explained Kushi
She continues that the market will experience pockets of weakness, but no wave of distress as inventory levels bounce back. She looks to First American calculations to support this, and that while it is an uphill battle, the market is looking up.
“The housing market enters 2026 on steadier footing. We expect affordability to improve mainly because prices are cooling and paychecks are rising, rather than because financing suddenly gets cheap. Demand is powered by milestones rather than spreadsheets.”
