Editor’s note: This is an excerpt from the November 2025 cover story of MortgagePoint magazine. You can read the full issue here.
As the housing market prepares to enter 2026, structural pressures are mounting, from a persistent supply shortage to affordability barriers that continue to sideline would-be buyers. At the same time, rising non-mortgage costs such as taxes and insurance are creating new risks for both homeowners and lenders. As part of our November cover story, MortgagePoint spoke with Molly Boesel, Principal Economist at Cotality, to explore the forces that will shape the coming year, the evolving role of single-family rentals, and the key indicators mortgage professionals should keep front and center.
From your vantage point at Cotality, what are the top three structural challenges you see for the U.S. housing market heading into 2026?
As we look toward 2026, we see three primary structural challenges that are deeply interconnected and will continue to dominate the market dynamic: the supply shortfall, affordability constraints, and rising non-mortgage costs.
We’re dealing with a long-term supply deficit stemming from underbuilding new homes since the Great Financial Crisis. Compounding that is the ‘mortgage-rate lock-in’ effect; existing homeowners are staying put to keep their low rates. The combination of not enough new homes and low turnover of the existing stock keeps inventory tight and prices elevated. Affordability constraints are a direct result of the supply issue, which keeps prices high. High home prices, when coupled with mortgage rates generally in the 6% and higher range, have pushed monthly payments well beyond the reach of many potential buyers. The final structural challenge is how other expenses are undermining affordability. We’re seeing affordability stressed not just by the mortgage, but by increases in non-mortgage costs, particularly property taxes and insurance premiums. It limits demand for new buyers and poses a genuine risk for existing homeowners, especially those on a fixed income. If those costs can’t be absorbed, it can ultimately lead to delinquency.
These three issues—supply, the resulting affordability crunch, and the rising cost to simply own and maintain a home—are the structural headwinds that will largely define the housing market for 2026.
You’ve done work on the single-family rental market. How do you view the market evolving in 2026 in relation to homeownership? Does it become a more significant part of the ecosystem?
The single-family rental (SFR) market should remain a significant, structural component of the housing ecosystem in 2026. This growth is primarily driven by the nation’s ongoing affordability crisis, as high home prices and mortgage rates keep a large pool of would-be buyers out of homeownership. These households often seek the size and quality of a single-family dwelling but are forced to be renters by necessity. While the pandemic-era surges in single-family rent growth have stabilized and will continue to normalize toward pre-pandemic averages, demand will remain robust. Consequently, the SFR segment is increasingly functioning as a long-term housing solution, rather than a temporary stop before buying. For investors, this translates into sustained demand and a solid, long-term asset class.
What do you see as the biggest barrier for Gen Z and younger homebuyers when it comes to meaningfully approaching homebuying in 2026, and might the obstacle shift from “can’t afford” to something else?
Affordability remains the primary barrier for Gen Z as they consider entering the housing market in 2026. Home prices remain high, and high rents continue to erode their ability to save for a down payment, which makes the path to homeownership more difficult. However, Gen Z has shown a willingness to relocate to more affordable markets when prices in high-demand areas are out of reach. It is also important to recognize that while entry-level home prices may appear accessible, they can obscure the true cost of ownership. Expenses such as maintenance and homeowners’ insurance often become the next financial hurdle once the purchase is complete.
If you were advising our readers (mortgage professionals) for strategic focus in 2026, what key metric(s) would you tell them to watch and why?
For mortgage professionals in 2026, the strategic pivot is simple: shift your risk focus to escrow shock. The real pressure point is no longer high debt, but the sudden liquidity strain caused by surging insurance and property tax costs. Our research clearly shows delinquency spikes are concentrated in areas with the sharpest rises in non-mortgage costs. Owners with large amounts of home equity would be able to use some of their equity to absorb increases in payments, but those who bought more recently, and those who used low-down payment loans, may be at a higher risk for delinquency.
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