For 2026, expect lower mortgage rates but a still-tough housing market.

Why it matters: Homes remain unaffordable for many, especially younger people.

Here's what industry economists predict.

Rates will stay above 6%

U.S. mortgage rates are expected to hover near 6.3% in 2026, according to Realtor.com chief economist Danielle Hale.

• Redfin also projects 30-year fixed rates will average 6.3%, dipping from 6.6% in 2025 while staying well above pandemic-era levels.

The big picture: Cheaper monthly payments could lift home sales, even if they won't move the needle for every buyer as economic uncertainty and other costs loom large.

Also offering shoppers some relief: Wages are expected to grow faster than home prices, which will rise another 1% in 2026, per Redfin's forecast.

More roommates, fewer babies

High housing costs may be reshaping U.S. households.

• Think: More adult children living with their parents (and vice versa), smaller families and more friends buying homes together, "often with prenup-style agreements," according to Redfin researchers.

Between the lines: "Entry-level inventory remains tight, limiting options for first-time buyers," says Selma Hepp, chief economist at Cotality, an industry data provider.

What we're watching: "Renovations that create space for multiple generations are becoming increasingly common," Redfin chief economist Daryl Fairweather tells Axios.

Tale of two markets persists

A regional divide in the housing market isn't going away.

Catch up quick: Home prices are rising faster in the Northeast and Midwest, where there's less newly built housing.

• In the South and West, they're softening as pandemic-era migration slows and insurance costs climb.

The latest: Northeastern and Midwestern metros now dominate Realtor.com's annual ranking of the top housing markets for 2026. That's a big shift from a year ago, when the top 10 were exclusively in the South and West.

The bottom line: Prices will likely increase 3 to 4% in the Northeast and Midwest this year, "supported by tight inventory and strong labor markets," Hepp tells Axios.

Go deeper

You voted in the first round, but we need to hear from you again to determine the most-missed place in Pittsburgh.

Zoom in: Moving on are Three Rivers Stadium, The O, Kaufmann's, Civic Arena, the Log Jammer ride at Kennywood, Century III Mall in West Mifflin, Bloomfield Bridge Tavern, and the Top of the Triangle restaurant that was on top of the U.S. Steel Tower.

Round 2 voting is now open and closes at 2pm today.

Vote here!

Homes are generally selling faster in the Midwest and Northeast and slower in the South — another sign of a split U.S. housing market.

The big picture: In parts of the South where builders have cranked out new homes, prices have eased and buyers have gained room to negotiate.

Zoom in: Homes are selling in an average of 35 days in Pennsylvania, according to Redfin.

What we're watching: Nationally, homes are changing hands at record low rates (and usually take longer to sell in the colder months).

• Roughly 70% of homes for sale in October sat on the market for at least 60 days, long enough to go "stale," according to Redfin.

🧊 Ice blockages formed at the city's water plant on the Allegheny River yesterday due to extreme cold. (Post-Gazette)

• Frigid temperatures are expected to continue throughout the week, dropping into the teens over the weekend. The city has opened up its warming centers in response.

📖 Gov. Josh Shapiro writes in his new political memoir that when former Vice President Kamala Harris considered him to be her 2024 running mate, her team asked whether he had ever been an agent of the Israeli government. (NYT)

⚕️ More than 900 nurses at UPMC Magee-Women's Hospital are launching their first contract negotiations after unionizing last year. They are seeking public input. (Press release)

More smashburgers are coming.

The intrigue: Moonlit Burger's Garfield location opens today.

• It takes over a former Primanti Bros. on Penn Avenue.

The vibe: Axios visited last weekend during a soft opening and staff members were extremely friendly. The space sports modern decor, but a retro spirit.

• There are over a dozen tables inside and another dozen seats at the circle bar, which serves local drafts, cocktails and wines at affordable prices ($3-$9).

• Smash burgers ($11-$13), fries ($4) and pickle brined chicken strips ($8-$11) come out hot and delicious.

If you go: 5491 Penn Ave. in Garfield.

• 4pm-9pm Wednesday through Saturday initially, with expanded hours coming soon, staff told Axios.

If decluttering is your New Year's resolution, don't skip your bedroom — even if no one else sees it.

Why it matters: "When you don't make your own space a priority, it leads to feelings of stress, overwhelm, and a lack of control that you carry with you throughout your day," write authors Meg DeLong and Ea Fuqua of "Tidying Up."

To tidy up where you get ready, DeLong and Fuqua, co-founders of a Nashville-based organizing company, recommend these daily tasks:

• Make your bed.
• Clear your nightstand of clutter.
• Pick up items left on the floor.
• Turn on a fan or crack a window.

The bottom line: "Creating a peaceful, organized bedroom isn't just about aesthetics. It's about setting the tone for both your day and night," DeLong and Fuqua write.