Housing Market Foresight: Ivy Zelman Predicts 2026 Dip, 2027 Rebound

One of the housing market's most respected voices, Ivy Zelman, a top housing researcher, has delivered a crucial forecast for prospective homebuyers, sellers, and investors alike. According to Zelman, the housing market is poised for a significant shift, with home prices expected to experience a dip in 2026 before finding their footing and rebounding strongly in 2027.

This prediction offers a vital roadmap for navigating the complexities of real estate in the coming years.

Zelman's analysis suggests that the current high-interest rate environment, coupled with persistent affordability challenges, will likely culminate in a period of price correction. As borrowing costs remain elevated, the pool of eligible buyers shrinks, and the urgency to purchase diminishes.

This softening of demand, alongside a potential increase in housing inventory as some homeowners decide to sell or new construction comes online, is expected to put downward pressure on prices throughout 2026. Buyers who have been sidelined by the frenzied market and steep prices may find a more favorable landscape during this period, offering a window of opportunity.

However, the anticipated dip is not indicative of a long-term downturn.

Zelman’s research points to a resilient rebound in 2027, driven by several key factors. A primary catalyst for this recovery is the eventual easing of monetary policy, which would lead to lower interest rates. More affordable mortgages would reignite buyer demand, particularly from younger demographics and first-time homebuyers who have been patiently waiting for market conditions to improve.

Furthermore, the underlying shortage of housing supply in many regions, a persistent issue that predates the recent market fluctuations, will continue to provide fundamental support for home values.

The demographic tailwinds, including a large cohort of millennials entering their prime home-buying years, will also contribute significantly to the market's resurgence.

This sustained demand, combined with an anticipated return to more normalized interest rates, is expected to absorb any excess inventory and propel home prices upwards once again. For builders, this cycle presents both challenges and opportunities, as they adapt to changing demand in 2026 before gearing up for renewed growth in 2027.

In essence, Zelman's forecast paints a picture of a market undergoing a necessary adjustment.

While 2026 may bring a period of tempered prices, it sets the stage for a healthier, more sustainable recovery in 2027. This perspective advises both caution and strategic planning for anyone involved in the housing market, emphasizing that understanding these cycles is key to making informed decisions for the future.