The U.S. housing market's expected rebound in 2026 has been downgraded, with existing home sales now forecast to rise only 4% instead of 14%. New home sales growth is revised to zero. The change is attributed to rising mortgage rates, now expected to average around 6.5%, limiting buyer affordability. Early 2026 sales have been disappointing, with month-over-month declines nationwide despite some regional year-over-year gains.