While the gains are modest, they hint at a broader structural reset. Redfin describes this change as a “Great Housing Reset,” where wage growth outpaces housing price increases for the first time since the Great Recession. This long-anticipated turn could reshape buying behaviors for years to come.
Affordability Remains a Barrier Despite Stabilizing Prices
The US housing market has cooled noticeably throughout 2025, with potential buyers squeezed by persistently high borrowing costs and limited affordability. According to Redfin, 445,607 homes were sold nationwide in October, up just 2.4% from the year before, but still far below pre-pandemic levels.
Median home prices continue to rise, albeit more slowly. As of October, the typical US home sold for $439,869, a 1.3% increase compared to the same time in 2024. By contrast, in October 2019, prior to the pandemic boom, the median price was $313,200. This shows that while price growth is decelerating, affordability remains a significant concern for buyers.
One of the central challenges remains elevated mortgage rates. The average rate dropped slightly to 6.23% in late November, according to Freddie Mac, in anticipation of potential rate cuts. However, Redfin does not expect a dramatic decline, warning that rates will likely stay in the low-6 percent range through next year due to lingering inflation and a resilient economy.
This means that although prices are stabilizing, monthly payments are still high. Redfin notes that “mortgage payments will grow more slowly than wages,” helping some regain buying power, but not quickly enough to significantly expand access.
A Long-Term Market Reset Leaves Many Buyers Behind
The anticipated rebound is not universal. Redfin projects a 3% increase in home sales by the end of 2026, reaching an annualized pace of 4.2 million. But these figures reflect a slow recovery, not a return to the hyperactive market seen between 2019 and 2022.
This shift is part of what the company calls a years-long process, where income will rise faster than housing costs. According to Redfin, this is “for the first time since the Great Recession era”, an inflection point that could gradually re-balance the housing market.
Yet even this cautious optimism doesn’t extend to all demographic groups. Young buyers, especially Gen Z and younger millennials, continue to face outsized challenges. Many are delaying major life decisions, such as starting families or moving out of multigenerational homes, due to limited affordability and uncertain prospects.
Redfin notes that this group is increasingly turning to non-traditional housing arrangements, including living with roommates or extended family, as a strategy to offset high housing costs. While affordability may technically improve in the coming years, the impact on accessibility remains uneven.
The recovery, then, is less about a return to previous highs and more about a slow recalibration of expectations. Affordability may inch forward, but for many Americans, homeownership will remain out of reach without deeper structural changes.
