My Honest Take on the Housing Market as We Head into 2026

Before anything else, let me lead with this: Everything you’re about to read is simply my opinion.

It’s based on experience, conversations, data points, trends I see daily, and most importantly…my gut. I’m not claiming to predict the future. But after 6.5 years of doing this full-time, I do have a feel for where things might be heading. And as we roll into 2026, I think it’s worth sharing that perspective.

Let’s Start With the Big One: Interest Rates

Rates are the first thing everyone asks about. Understandably so. They impact affordability more than anything else, and for the past couple of years, the industry has been reassuring people that better days are “right around the corner.” And yes, there have been moments where rates dipped into the mid-to-high 5% range. I refinanced plenty of clients when those windows opened… but those windows didn’t stay open long. Usually 2–3 weeks at a time. Then the rates shot right back up.

My honest belief?

That’s exactly what 2026 will look like.

I think we will hover in the low 6% range on conventional mortgages, with occasional (and brief) dips into the mid-to-high 5s. Just enough movement to get people hopeful… but not enough for a major shift in buyer behavior. This “stuck in the middle” rate environment has already defined the last couple of years, and I don’t see it changing much in the near future.

Why the Market Feels Stalled Right Now

If you look around Southeast Michigan as we wrap up 2025, you’ll notice something: Homes are sitting on the market longer than they were the past few years. Why?

Well… there isn’t one reason. It’s everything layered together:

• Interest rates that feel too high.

• Home prices that climbed and never came back down.

• Insurance premiums that keep rising.

• Property taxes that jumped from uncapping.

• Maintenance and upgrade costs that scare first-time buyers.

• Inflation that ate into disposable income.

• Wages that didn’t keep up with any of this.

  • One of these things alone isn’t enough to stall the market. All of them together? That’s a problem.

A “starter home” in Southeast Michigan is now $200k–$300k. And someone buying a home at that price point could be looking at a $2,300–$2,700 per month payment once you factor in taxes, insurance, and mortgage.

That’s incredibly intimidating when a household is netting $5,000–$6,000 a month. Add in the fact that many of those homes need updates, repairs, or cosmetic work and the fear becomes real.

So yes… the market feels tapped out. And to be honest, it is.

Numbers from the National Association of Realtors also paint a clearer picture: The average first-time homebuyer in the U.S. is now 40 years old. That stat floored me. It shows just how much affordability has drifted from younger buyers.

But Here’s the Good News… It’s Not All Doom and Gloom

For as challenging as the current landscape is, there’s still a very real long-term upside to owning a home. Real estate is one of the few assets that tends to appreciate over time. Even in tough markets. Even in sideways markets. Even in unpredictable markets.

If you can get into a home and comfortably afford it, it’s one of the best long-term financial moves you can make. Equity builds quietly. Appreciation compounds slowly. And suddenly, after a few years, you’ve created financial stability in a way renting simply can’t replicate.

There are opportunities out there: Homes sitting longer = more negotiating power. Sellers becoming more flexible. Occasional rate dips that create refinance potential later. Local incentives and programs (the ones still left). Creative buying strategies that reduce upfront costs.

No, it’s not an easy market. No, it’s not the 3%-rate world we got spoiled with. But owning a home still makes sense when approached with a plan, patience, and a clear understanding of the numbers.

My Final Thoughts

2026 won’t be the year rates magically plummet or the market suddenly becomes “affordable” again. But it also won’t be a disaster. It will simply be… the new normal.

And in that new normal, people will still buy homes, sell homes, build wealth, and plant roots.

As always, my goal is simple:

Be transparent. Be realistic. Be a resource.

If you’re thinking about buying, refinancing, or just want to talk about your options heading into 2026, I’m here. No pressure.

— Erik Taurence

Founder, Fresh Coast Lending