On December 11, 2025, Compass, Inc. (NYSE: COMP), the largest residential real estate brokerage in the United States, unveiled its inaugural Housing Market Outlook, providing a forward-looking perspective on the U.S. housing market for 2026 and beyond. Developed by Chief Economist Mike Simonsen, the report highlights a significant recalibration of the market following a tumultuous post-pandemic period defined by slow home sales and persistently high prices, which have kept many buyers and sellers on the sidelines.

1. A Market on the Rebound

As the calendar turns towards 2026, both buyers and sellers are adjusting their expectations. The report notes several encouraging trends: home prices are stabilizing, more inventory is becoming available, and rising wages are enhancing affordability. These factors are expected to entice long-delayed buyers and sellers back into the market, setting the stage for a rebound in sales.

Key Dynamics Shaping the 2026 Housing Market

Compass’ report identifies three primary dynamics anticipated to influence the housing market in 2026:

Improved Affordability: With wages projected to outpace home price growth, affordability is set to improve for many potential buyers.

Return to Mobility: The report anticipates a resurgence in American mobility as individuals who have been hesitant to relocate finally have the opportunity to do so.

Diverging Economic Conditions: The housing market will experience varied outcomes based on geographic and economic factors, with luxury segments continuing to outperform entry-level properties.

“The market is shifting toward a new era where incomes rise faster than home prices and the deep freeze of the last few years begins to thaw,” Simonsen commented. “After years of delay, anyone looking to make a move should finally see greater opportunities to take the leap.”

2. Projected Housing Market Metrics

The Compass Outlook provides projections for several key housing market metrics for 2026:

Home Prices: Nationally, home prices are expected to remain flat with a slight growth of approximately 0.5%.

Inventory: A nationwide increase in inventory of about 5% is forecasted, offering more choices for buyers.

Mortgage Rates: Average mortgage rates are projected to hover around 6.4%, which should support higher sales volumes.

Sales Volumes: Existing home sales are anticipated to rise between 4.25% to 5% from 2025.

It is important to note that these national averages may mask significant regional disparities. For instance, while the Northeast and Midwest face constrained housing supply, some states in the Sun Belt have already experienced price declines due to excess inventory. Such divergent dynamics are expected to continue influencing local market conditions.

3. The Luxury Market: A Resilient Segment

The report also highlights the resilience of the luxury housing market, defined as transactions exceeding $1 million. This segment has thrived over the past few years, bolstered by affluent buyers who tend to be less sensitive to interest rates, often pay in cash, and benefit from robust financial markets. Compass anticipates that the luxury tier will maintain its strength into 2026, further diversifying the overall market landscape.

4. Conclusion: A Turning Point for Home Sales

Overall, Compass’ Housing Market Outlook is optimistic, suggesting that 2026 will serve as a pivotal year for the U.S. housing market. The combination of rising wages, increased inventory, and flat home prices is expected to stimulate home sales, indicating a transition into a new and more balanced phase of the market.

For those interested in a deeper dive into the 2026 Compass Housing Market Outlook, the full report is available at compass.com/research/market-outlook.

Media Contact:

Devin Daly Huerta

Original press release