These 8 charts show what bubble-spotter Ivy Zelman thinks will happen in the US real-estate market after the least affordable year since 1984

Many of last year's upbeat predictions about the housing market, including from Zelman, centered around declining mortgage rates. The 30-year fixed rate had tumbled from 7.8% in late October to 6.6% by New Year's, and analysts said it would fall further as interest rates dropped.

Rates then reversed higher through April to 7.2%, which was a major surprise for Zelman. The unexpected jump in borrowing costs postponed sales, though it looked like a blip once rates trended lower through the summer and into the early fall.

But in the last four months, rates have steadily risen back to highly restrictive levels. The US economy is even healthier than expected, and investors think President-elect Trump will usher in even stronger growth and potentially higher inflation.

Either way, markets are counting on higher-for-longer rates, as is Zelman. She thinks rates will be roughly flat this year and sees the 30-year hovering around 6.7% before slipping to 6.5% in 2026. That means buyers shouldn't hold their breath for lower borrowing costs.

Elevated mortgage rates are a dealbreaker for many buyers and unacceptable for others.

About three-quarters of current owners have mortgage rates below 5%, Zelman's firm found, and over half (56%) are locked into rates lower than 4%. It's no wonder why they're reluctant to swap that rock-bottom rate for a 7% mortgage.

However, those who need to move may decide they can't wait any longer, given that rates may stay near current levels for years.

Both new and existing home sales should rise about 5% next year in a healthy economy, in Zelman's view. A year ago, and last April, she thought sales would surge 8% in 2025, which reflects how higher-than-anticipated rates are weighing on demand.

Homeowners are already reluctant to move, so it stands to reason that they'll hold out for higher prices. Properties already on the market should sell for about 3% more than last year, according to Zelman & Associates, though that's below last year's rate and the expected figure for 2026.

A glut of new homes entering the market will keep prices at bay, Zelman and her team say. They expect freshly made properties to sell for 1% more than in 2024, following a year of flat prices.

On the rental side, Zelman thinks landlords will still score price hikes, though at much lower rates than in the mid- and post-pandemic boom.

Rent growth should fall below 3% for single-family units for the first time in a decade, as rising inventory means that the occupancy rate isn't nearly as stretched as it was a few years ago.

Rent for multi-family units, which includes apartments, will also stay subdued, Zelman's firm said. Rent in these setups may drift north of 2%, but that's still well below levels from the 2010s.

The silver lining for renters is that these increases shouldn't break the bank. Wage growth outpaced rent growth last year for the first time since at least the mid-2010s, according to Zelman & Associates, and the trend should continue this year and into 2026.

There's a simple reason why rent growth isn't budging much: tenants increasingly have options since apartment supply is soaring.

Last year saw the ninth-biggest increase in multi-family inventory in the last five decades, Zelman and her peers noted. Over 600,000 new multi-family setups went online in 2024, and while that figure may fall this year, it still should be a big year for apartment construction.