One of the country’s largest real estate brokerages thinks that the New York City metro region is poised for a bit of a comeback this year as interest rates fall a bit despite continued affordability concerns.
Redfin recently offered up their predictions for the coming year’s housing market and they highlighted a bit of everything both good and bad, perhaps an indicator of where things stand. The brokerage determined that the New York City outskirts and Great Lakes regions of the country will be the next hot markets, while “Zoom towns” that boomed during the pandemic will start cooling a bit.
The company explained their rationale behind the prediction by saying that areas close to New York City will attract people who need to commute to the office. Markets including Long Island, the Hudson Valley, Northern New Jersey, and Fairfield County, Connecticut set to heat up, as are areas near Syracuse, New York, Cleveland, St. Louis, Minneapolis, and Madison, Wisconsin.
Conversely, housing markets most likely to cool down according to Redfin include Nashville, San Antonio, Austin, Fort Lauderdale, West Palm Beach, and Miami. Many of those spots have seen dramatic growth in recent years but have become bogged down with insurance costs and other issues related to natural disasters.
Other predictions offered up by Redfin include a prognostication that rents will rise as the apartment supply falls. The company expects rents to rise about 2% to 3% year over year by the end of 2026, as apartment construction has slowed from its 2021-2022 surge and is expected to continue slowing.
On the brighter side, Redfin is also predicting a stronger spring homebuying season in 2026. Mortgage rates declining to around 6.3% from 6.8% during the spring of 2025 could lead more “on the fence” buyers into the marketplace.
However, the company also says sales could increase only slightly because many house hunters will remain priced out or limited by a stalled labor market. Redfin does expect the median U.S. home-sale price to rise 1% year over year in 2026, which would be a much more marginal increase compared to almost any recent year.
