5 Economic Shifts That Could Shape Real Estate in 2026 (Insights from my favorite economist, Marci Rossell)

I recently listened to an interview with one of my favorite economists, Marci Rossell, and she laid out five key economic developments that I believe directly impact housing — especially here in Massachusetts.

Rather than give you textbook economics, here’s what actually matters and why it’s relevant if you’re buying, selling, building, or just watching the market.

1. The Fed Hit Pause — And That Matters

The Federal Reserve kept rates unchanged at 3–3.5% at its January meeting.

Unemployment is sitting around 4.5%, which historically is considered healthy. The economy is still growing steadily.

Earlier this year, inflation ticked up again — largely because tariffs were increasing costs on imported goods. Now that the Supreme Court has struck down most of those tariffs, some of that pricing pressure may start to ease.

Why that matters:

If inflation cools, the Fed has more flexibility. And when the Fed has flexibility, mortgage rates eventually follow that direction.

No promises. But the door isn’t closed.

2. Tariff Removal Could Mean Lower Consumer Costs

Tariffs had climbed to roughly 11% on average. That added cost didn’t just sit on a spreadsheet — American consumers absorbed most of it.

Companies had also been stockpiling goods ahead of tariff increases, which temporarily distorted trade numbers.

Now that many of those tariffs are gone, lower-priced imports can re-enter the system. That should gradually ease pressure on goods pricing.

Translation for homeowners:

Lower inflation = improved affordability environment

Lower business costs = healthier economic stability

When people feel stable, they make moves. And real estate thrives in stable environments.

3. Financial Markets Like What They’re Seeing

After the Supreme Court decision on tariffs, markets responded positively.

Investors are encouraged by:

• Reduced cost pressures

• Clearer monetary policy direction

• Potentially lower inflation ahead

  
  

Markets move on expectations, not headlines.

When investors believe inflation is moderating, it supports confidence. And confidence drives spending, investing, and yes — housing activity.

4. The Housing Outlook Is Quietly Improving

This is the one that caught my attention.

Marci highlighted two big housing impacts:

A) Potential Mortgage Rate Relief

If inflation moderates, the Fed may have room to ease policy later this year. That could put downward pressure on mortgage rates.

Even a modest rate drop unlocks a surprising amount of buyer demand.

B) Lower Construction Costs

Tariffs had been increasing material prices. Removing them helps reduce input costs for builders.

Builder sentiment had been slipping because of rising material expenses. If costs come down, we could see:

• Increased construction

• More inventory

• A more balanced market

  
  

And let’s be honest — inventory is what we need most here in Massachusetts.

More supply = more movement.

5. The Global Economy Is Holding Up Better Than Expected

Despite geopolitical noise and global uncertainty, the world economy has shown resilience.

One major factor: the U.S. dollar has fallen roughly 9%.

A weaker dollar:

• Attracts global investment into emerging markets

• Lowers borrowing costs overseas

• Makes dollar-denominated debt easier to manage

• Supports commodity pricing

  
  

Since the 2008–2009 financial crisis, global institutions have strengthened. Central banks are more disciplined. Economies are more diversified. There’s less dependence on the U.S. dollar than there used to be.

All of that creates a more stable global backdrop. And stability supports housing.

My Take as a MA/RI Realtor

What I appreciate about Marci’s perspective is that she isn’t predicting fireworks — she’s outlining steady, structural shifts. And in real estate, steady is powerful.

If inflation continues to cool as tariff pressures ease, the Federal Reserve has more room to maneuver. That doesn’t guarantee rate cuts tomorrow, but it does change the tone of the conversation. Even modest improvement in mortgage rates can unlock meaningful buyer demand, especially here in Massachusetts where inventory has been the primary constraint, not lack of interest.

The other piece that stands out to me is construction. If material costs stabilize or decline, builders regain confidence. That matters. We don’t have a demand problem — we have a supply imbalance. Anything that encourages new building or accelerates stalled projects helps move us toward a healthier market.

What this all signals isn’t a sudden boom, but a gradual normalization. More clarity. More confidence. More movement. And when confidence returns to consumers and builders at the same time, housing activity tends to follow.

From where I sit locally, the early macro signals are aligning in a way that could support a more balanced and active 2026. Not dramatic. Just constructive. And sometimes that’s exactly what the market needs.