AD Mortgage Digest: 2026 Market Analysis with Rick Sharga

When the market may feel uncertain, brokers need clear guiding lights. Rick Sharga, the respected housing market analyst and the founder of CJ Patrick Company, joins the AD Digest to break down what 2025 revealed and what our partners should be watching in 2026.  

Together with Serena Diaco, AD Mortgage Sales Trainer, they discuss the Fed, inflation, unemployment, and market trends – read on or watch the video version to learn more.

2025 Overview: Inflation and Rates

Continuing the tendency from 2022, the market didn’t bring many surprises in 2025. With around 4 million home sales a year, the industry has felt a bit like Groundhog Day. 

‘One of the things that surprised me a little is how little market momentum we have seen going throughout the year. The other thing that is a little surprising is how resilient home prices have been – December was the 30th consecutive month that prices rose year over year.’ 

Despite the Federal Reserve’s efforts to maintain inflation and the aftershock on the housing market, homeownership is still unaffordable for many Americans. 

‘To combat post-pandemic inflation, the Fed had to raise rates in a manner that we have never seen before. That created a shock to the mortgage system, and mortgage rates doubled – and they had never doubled in a single year in the history of the United States before 2022.’ 

Shutdown Consequences

The government shutdown lasted for a record 43 days and was all over the news. What impact did it actually have on the mortgage industry? Rick doubts that it was significant: 

‘The government shutdown itself fortunately did not last long enough to cause the housing market damage. If it had gone on longer, it probably would have had more severe implications for the market. The only real impact we have seen is a delay in the reports that the government puts out.’ 

Macroeconomic Data vs. Borrower Sentiment

While the Wall Street stock indices, including the S&P 500 and the Nasdaq, are performing around record highs, Main Street is having some lingering issues. 

‘Despite GDP growing, the low unemployment rate, and strong wage growth, consumer sentiment is at an all-time low. The reason for the disconnect is that the cost of living skyrocketed during that period of inflation.’ 

Now, many households are struggling to make ends meet. High credit card debt and low personal savings suggest many households still haven’t recovered from the price spikes of recent years. 

Regional Markets Differences

People have started moving from high-cost areas to more modest regions ever since the pandemic. Now, this tendency is still apparent, although not at the same level. 

‘People are moving out of states like California, New York, and Illinois, into the Midwest, the Plain states, South, and Southeast. We still see a lot of migration to the Carolinas, Tennessee, Alabama, and northern Florida.’ 

Due to a lack of inventory, home prices in the Northeast and Midwest areas are going up 4% to 7% year over year, compared to around 1.4% on average nationwide. In some markets, such as Florida and Texas, ownership costs are rising due to skyrocketing insurance rates, property tax growth, and overbuilding, making homes less affordable and weakening property values. 

Economic Signals to Keep in Mind

Population, wage, and job dynamics are three key factors that brokers and lenders should consider. It is important to look at them not at the national level but on a local market basis. Understanding these market conditions helps determine whether the loan will succeed. 

‘The X factor is insurance rates. We never had to think about insurance as a big part of qualifying and whether the homeowner would be able to continue to afford their home. It is the new reality today.’ 

So, what is the reason for this nationwide problem? We explored insurance rates and property tax growth in detail in our recent article. 

2026 Broker Advice

Rick suggests not being too optimistic about 2026 and not expecting miracles: 

‘After 2022, the market adjusted to these new higher costs through a gradual, slow reset period. To me, 2025 felt like we have passed the midway point of that reset period. 2026 is going to be a market where we see a gradual but slight improvement. We are starting to see the light at the end of the tunnel.’ 

What are your thoughts on what 2026 is going to be like? Please share them in the comments under the video on our YouTube channel.