2026 Housing Market Trends – What Do Investors Need to Know?

Housing Market Predictions 2026

Half of real estate investing can feel like a guessing game, and in a way, it is. The key, however, is making educated and informed guesses based on historical and current trends. You can’t know the future, but you can have a pretty good idea of what it will look like for your assets based on broader trends in the housing market, economy, and government policy.

Near the end of 2025, we surveyed 400 current real estate investors (and Innago users) to discover what their predictions for the coming year were and why. To aid in your planning for the coming year, we’ve put together a comprehensive resource: Innago’s 2026 Market Outlook Report.

In this report, we uncover trends related to market sentiment, investing plans and trajectories, market hotspots, and even the growing role of AI in real estate. Take a look at some key data we’ve compiled below on our investors’ predictions, as well as some real estate investing trends 2026 could have to offer– but be sure to download the full report for a complete picture of the year ahead.

Key Takeaways

• 2026 housing market sentiment is dominated by widespread uncertainty and cautious optimism, with almost half (46%) of respondents feeling neutral, 35% feeling optimistic, and only 19% feeling pessimistic.
• The Midwest and South stick out to Innago users as the biggest regions for investment opportunity in 2026.
• Cash flow is the main factor driving investors in their decisions on where to invest, along with affordability and appreciation.
• A majority (72%) of real estate investors surveyed are either already using AI or planning to do so in the future—indicating the widespread perceived value of AI tools in the real estate industry.

Market Sentiment

How investors feel about the housing market has always been a great indicator of its current state. Housing market sentiment is shaped by both public perception and tangible economic signals—factors like mortgage rates, home prices, interest rates, personal experience, and employment rates.

Overall housing market sentiment among investors follows national and global events, such as the historic lows following the Covid-19 pandemic, as well as overarching trends like the affordability crisis. It’s an investor’s job to keep their finger on the pulse of the market, as their perception of it will directly influence the financial decisions they make.

So, what are their 2026 housing market predictions? Among many, here are two emerging trends:

Cautious Optimism

Almost half (46%) of respondents reported neutral sentiment towards the housing market in 2026, 35% said they felt optimistic, and only 19% reported pessimistic sentiment.

When broken down by sector:

Residential landlords in our sample were found to be slightly more optimistic than commercial landlords.

Regionally, Midwest and Mid-Atlantic investors were more likely to report feeling optimistic, while Rocky Mountain, Pacific, and West Coast regions were more likely to report pessimism than other regions. This tracks with Zillow’s list of cities projected to experience the largest home price increases and decreases in 2026.

Housing and Rents Find Stable Ground With Steady Climbs Ahead

We asked respondents for their housing price and rental demand projections. Our survey found:

48% of Innago users surveyed predicted no change in housing prices for 2026. 38% of respondents predicted an increase, while 15% predicted a decrease.

Real estate investing activity reflects the direction investors believe the markets to be going, which is often a good indicator for the future. Here’s what our survey respondents had to say about their investing plans in 2026.

Multi-Family Housing is King

As times change, so do the most popular and best performing property types. We surveyed investors an asked them which type of properties they believed would present the biggest opportunities in 2026.

Of those we surveyed:

• 56% checked multi-family homes
• 40% checked single-family homes
• 15% checked self-storage
• 13% checked short-term rentals
• 11% checked mid-term rentals

With housing affordability decreasing across the country, this trend makes sense. Almost 1/3 of all occupied homes in 2025 were rentals, according to the U.S. Census Bureau, and now more than ever, tenants are looking to find the most affordable options possible. Multi- and single-family homes have historically been the most reliable option for these tenants, and it seems they will continue to be in the next year.

Sellers are Cashing Out in the New Year

Although some of our respondents were looking to buy in the coming months, some reported an opposite approach. We asked the investors surveyed who were looking to sell their properties rather than acquiring new ones what their reasoning was for doing so.

Of the investors readying to sell rental properties, 20% cited cashing out as their main reason. Another 18% cited low cash flow, and 14% cited a perceived seller’s market.

The volatility of the housing market in 2025 likely sowed some underlying market uncertainty into investors, driving them to secure their profits while they feel they still can.

Market Hotspots

There’s no perfect place to invest, as regional markets can experience drastic changes year by year. We surveyed almost 200 Innago users and asked about the real estate investing trends 2026 may have to offer. Our survey covered regional expectations, potential hotspots for growth, and what market characteristics draw investors to new areas.

The Midwest and South Stand Out

A number of investors we surveyed indicated that the Midwest and the South are expected to see growth in the coming year. Specifically, investors are keeping their eyes on Texas and Florida. Recent lists from NAR and BiggerPockets also predict growth in states like North Carolina, Virginia, Ohio, and Illinois, further validating the intuition of our investors.

AI-Powered Rental Ownership

In 2023, “AI” was declared word of the year by Collins Dictionary. Since then, artificial intelligence has only become more commonplace in every facet of life and field of work. Wondering how AI is changing real estate in USA markets? What about how AI will change the field of real estate?

Investors can view AI in real estate as another step in the PropTech revolution—tools that allow for online rent collection, e-signatures, and more, are being further refined with the help of AI. For instance, a recent study by Morgan Stanley Research found that AI can automate 37% of real estate tasks, representing $34 billion in operating efficiencies

We understand what AI is capable of, but it’s equally important to grasp exactly how it’s being used. In our survey, we asked investors to share their thoughts on AI in real estate. Here are two of the many insights revealed:

Most Investors Are Adapting AI Into Their Workflows

Artificial intelligence-powered tools and workflows continue to emerge in real estate. Of those we surveyed,

Property Managers and STR/MTR Owners Are The Most AI-Forward

Not every investor is interested in utilizing AI, so we set out to search for any commonalities and trends within our data. Are certain types of investors more or less likely to utilize AI?

We found that:

• Property managers were the most likely to be currently using AI, followed by part-time landlords and then full-time landlords.
• Almost half (49%) of full-time landlords have plans to use AI in the future.
• Part time landlords had the largest percentage of respondents not interested in using AI for their rental business.

Additionally, we found that short-term and mid-term rental owners were the most AI-positive. This makes sense, as those responsible for the bulk of administrative tasks and frequent turnover likely have more tedious recurring tasks that they’d prefer to automate.

Conclusion

In uncovering shared sentiments among a pool of investors, we gain valuable insight into the real estate investing trends 2026 may bring. Each investor’s opinions and 2026 housing market predictions are informed by their unique combination of experience, portfolio size/type, location, staff, role, and more. This variety is key, as it allows us to look for the stable common ground in the middle of it all: the beliefs shared by most investors are often the most reliable.

As with any prediction of the real estate market, take each insight with a grain of salt. These research-backed predictions are a starting point for further investigation and investing decisions, and of course can’t be guaranteed. But one can often find wisdom in the crowd, and compiling the predictions of many investors as we have in this report is a great place to find it.

Looking for more insights on this year’s housing market? Download our 2026 Market Outlook Report below to get the stats and dive into other emerging trends in real estate investing, AI, and more.

FAQs

What is Innago’s 2026 Market Outlook Report?

Our report provides data-driven insights and trends based on the sentiments of real investors, helping others make informed decisions for their 2026 portfolios.

What real estate investment trends are expected in 2026?

Key trends include an emphasis on multi-family homes, adoption of AI, and growth in the Midwest and South. These trends reflect shifting investor priorities in response to economic conditions.

How is AI changing real estate in the USA?

AI in real estate is transforming the industry, with 72% of investors planning to use it for tasks like data organization and virtual assistance. This highlights how AI is changing real estate in the USA by enhancing efficiency.

Which regions are expected to be real estate hotspots in 2026?

The Midwest and South, including Texas and Florida, are anticipated to grow according to 2026 housing market predictions. These regions present promising opportunities due to favorable economic conditions.

Why are some investors choosing to sell properties in 2026?

Investors are cashing out due to reasons like low cash flow and a perceived seller’s market. These actions reflect strategic responses to the current real estate investing trends in 2026.