Housing has spent 2026 running in place, and Zonda Chief Economist Ali Wolf doesn’t expect the picture to change much before 2027.
Wolf delivered the national portion of Zonda’s third quarter housing market forecast webinar on Tuesday, saying that existing- and new-home sales are tracking essentially flat with 2025, with the firm now calling 2026 a “flat to down year” and 2027 a “flat to up year.”
But flat, Wolf argued, isn’t the same as broken. Measured against the past decade and adjusted for supply and seasonality, “it’s not actually as bad of a market as it feels when it comes to history,” she said. Zonda’s market ranking rates the national picture as average, with 53% of its top markets falling in that band. The underperformers cluster west of Texas, “where affordability is stretched to a greater degree.”
The frustration is in the execution. Margins remain compressed, and half of the builders Zonda surveys said their price cuts and/or incentives are running higher than they were a year ago.
“We’re still in a market that feels like it’s stuck in a rut,” Wolf said, ticking through a familiar list: a tough sales environment, mortgage rates at 6.7%, labor market concerns and persistent consumer confidence issues.
Based on Zonda’s surveys, consumer objections split roughly two ways—price and value. On price, the new-home market has shifted decisively upmarket. Homes under $350,000 accounted for 42% of the market in 2019; that share has since been cut in half. Over the same stretch, the above-$500,000 segment climbed from 29% to nearly 50%.
Part of that is who’s still buying. “You think about the K-shaped economy, you think about who’s still buying today. It’s wealthier households that are most engaged,” Wolf said. The rest is cost—construction constraints, land prices and regulation. Incomes have risen, she noted, but price-to-income and payment-to-income ratios have risen faster.
The result is a market where people are staying put. Apartment lease renewals are near record highs, and large operators are reporting record-low shares of residents moving out to buy.
Still, Wolf pointed to a silver lining in Zonda’s demographic survey work, which added Gen Z respondents for the first time last month—fewer than 5% of millennials and Gen Z say they never want to own. One in four millennials and one in five Gen Z want to buy within one to three years.
“There is absolutely still a desire to own a home as part of the American Dream,” she said, adding that lower rates, job security and lower monthly costs could move those buyers off the sidelines without the industry carrying the load alone.
