How to Stay Ahead in a Changing Housing Market

While many housing industry experts still expect to see an improvement in home sales in 2026, there are deeper demographic and economic risks that could weaken the market instead. According to a recent blog post from home building consulting firm Shinn Group, housing demand ultimately depends on population growth and having a high share of financially secure households—both of which are on the decline. The U.S. may actually be losing population because millions of immigrants are leaving the country. Additionally, deaths in the U.S. are outpacing births as more households wait or choose not to have children.

Lower mortgage rates could help bring more buyers to the housing market. However, if rates fall because the economy weakens and unemployment rises, then housing demand could decline.

To stay ahead, Shinn Group suggests builders should focus closely on local market conditions, including who is buying homes, where buyers are coming from, why and where people are moving, and what products buyers actually want.

Your guess is as good (or better) than the economic and financial experts about whether unemployment will rise or the stock market will fall in 2026. In the meantime, pay even more attention to:

1. The age of the people who are buying your homes, your competitors’ homes, and the existing homes in your submarkets (state, county, city, town, zip code, census tract or neighborhood) where you build.
2. Where those people come from.
3. Why those people buy from you, your competitors, and the existing homeowners in your markets.
4. Why people are moving from the existing homes and higher-end rental projects in your market area (you may be able to entice some of them to stay and buy from you).

If you don’t understand these things, how will you know what product and features to build, where to find your customers, or what to say to them?

If you are in the rental market, these changes (a rising supply of homes on the market, a falling demand for buying homes, falling mortgage and other interest rates, and a falling stock market) will improve occupancy rates, particularly for nicer rental homes, although rental rates will not increase and may decrease. You’ll also be able to refinance at a more reasonable rate.

To stay ahead of changing economic conditions, develop business plans for each scenario, including the specific actions you will take. Review and adjust these plans quarterly.