Excess Returns The Crash That Won’t Come | Redfin Chief Economist Daryl Fairweather on the Great Housing Reset
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Jan 24, 2026 
Daryl Fairweather, Redfin chief economist and author of Hate the Game, explains the Great Housing Reset as a multi-year shift toward normalcy. She discusses mortgage rate dynamics, the inventory lock-in that keeps supply tight, regional winners and losers, climate and insurance risks, and how AI and policy reforms could reshape housing choices.
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Lock-In Will Take Years To Unwind
- Falling mortgage rates and easing lock-in will slowly raise sales and inventory, but unlocking pandemic-era locked homes may take ~5 years.
- Rate improvements increase affordability but won't instantly normalize low inventory.
Midwest And Rust-Belt Strength
- Midwestern and some Northeastern industrial cities are seeing the strongest price gains because they missed the pandemic boom and remain affordable.
- Local demand outpaces supply in these regions, supporting continued price growth.
Renting Can Be The Better Near-Term Choice
- If you can, prioritize renting while your wages grow and rents stay stable; buying now may raise monthly costs versus renting.
- Consider moving to significantly cheaper markets or relying on family help to bridge the affordability gap.
