HousingWire Article

HousingWire: Pent-Up Demand Could Drive a 2026 Housing Surge

The U.S. housing market may be poised for a historic surge as pent-up demand meets a potentially lower rate environment.

As part of an expert panel at HousingWire’s 2026 Housing Economic Summit, MBS Highway founder and CEO Barry Habib said the first move downward in mortgage rates could trigger a rush of buyers who have delayed purchasing for years.

“Whenever rates make that next move lower, sales go vertical,” he told attendees. “It’s because home sales have been depressed for so long, and then, all of a sudden, rates go lower, and everyone’s like, ‘Okay, let’s all go in.’”

HousingWire Lead Analyst Logan Mohtashami added that the next significant rate drop toward 5% could unleash buyers who have been waiting for years.

“We haven’t had rates go towards 5% yet,” he said. “You’re going to see a rush of people who have been waiting for so many years. It’s more about past demand that should have been there. We still have over 162 million people working. We have five generations of homebuyers. They’re still here and not going anywhere.”

Supply Constraints, Capital Gains Tweaks

While demand may rise, inventory remains constrained.

Audience members asked about measures to boost supply, including tweaks to capital gains rules in areas where housing stock is tight.

Habib said while capital gains adjustments could temporarily increase listings, the effect on long-term inventory might be limited.

“Inventory, to a degree, can be a wash if the mortgage buyer comes in,” he said. “So, you can get more sellers out there. I’m not sure if that’s going to create more inventory outside of that first rush, because if you get that seller, he’s going to wait for that buyer to come in — and then that person buys the house, inventory is a washout.”

Mohtashami said inflation-adjusted capital gains limits could cover more homeowners and encourage sales.

“If you just would have adjusted for inflation, you have a significantly higher number that would encompass a lot more people,” he said.

The Supreme Court Tariff Ruling

Market participants are closely watching a pending Supreme Court decision on tariffs implemented by the Trump administration.

Audience members asked whether a ruling declaring the tariffs illegal could influence rates.

“I think that it could be a problem for the bond market,” Habib said. “That’s because you’ve got $300 billion in additional money that’s been taken in. Without that revenue, you’d have to issue more debt. So, the bond market is very sensitive to additional debt issuance, and that’s a significant amount. Now, there are other measures that the President could take with appeals and so on — so I’m not 100% sure as to which way it’s going to go.”

Mohtashami also highlighted potential debt issuance concerns.

“If those tariffs were to go away, or worse yet, to some extent needed to be funded, that money comes out of the coffers of the Treasury,” he said. “We still have to pay our bills, and that means we have to issue more debt, and that’s got to be resolved by the markets.”

China, Japan and the “Paper Tiger”

Questions also turned to China and Japan and their holdings of U.S. Treasuries. Concerns were raised about whether these countries could destabilize markets by selling off debt.

Habib said China’s strategy is deliberate but ultimately limited in effectiveness.

“China’s been trying, especially lately, to dissuade banks from investing in U.S. Treasuries,” he said. “This strategy, while it hurts the U.S., it hurts China as well, because if the Renminbi is more expensive, their exports will suffer because of it.”

Mohtashami dismissed alarmist theories.

“It’s a trash statement,” he said. “It’s always been a theory by internet people on YouTube, and I implore everyone, be careful who you listen to on YouTube, Instagram and Tiktok. Those are not experts. China has been dumping our treasuries for years. China is a paper tiger. The prime age population growth peaked around 2015, like Japan. They’re going to have a demographic issue.”

With pent-up demand, multi-generational buyers and a market suppressed for years, 2026 could be a landmark year for U.S. housing after prolonged post-COVID difficulties.