real estate – As buyer demand cools and mortgage rate expectations climb, the U.S. housing market is shifting, with AI becoming a standard tool for both clients and agents.
The familiar rhythm of the housing market is slowing down, leaving the professionals on the front lines to navigate a landscape where optimism is increasingly hard to find.
Between August 17 and September 29. 2026. a survey of 208 real estate agents and brokers—nearly half of whom have been in the business for 15 years or longer—revealed a national cooling. Some 63% of agents report that buyer demand is lower than it was 12 months ago. This pullback is sharpest in the Midwest, where 74% of agents see declining interest, and the Southwest, where 66% report similar cooling.
As buyers retreat, the leverage once held by sellers is slipping away. Nationally, 74% of agents say the balance of power is shifting toward homebuyers. In the Southwest, that number reaches 89%, followed by 78% in the Southeast and 74% in the West. With demand waning. seller urgency is ticking upward; 49% of agents nationwide say sellers are more desperate to move than they were a year ago. particularly in the Midwest. where 60% of agents noted heightened urgency. The Northeast remains the outlier. with half of agents reporting no significant shift in leverage or seller behavior compared to last year.
Economic expectations have soured alongside these trends. Only 30% of agents now expect local home prices to rise over the next year. down from 39% in the fourth quarter of 2025. Conversely, the share of agents expecting slight price declines has risen to 30%, up from 22%. Mortgage rate optimism has also evaporated; while agents ended 2025 bracing for rates in the low-6% range. the current consensus has shifted to the upper-6% range. with a significant portion expecting rates to hold at or above 7.0%.
This climate has weighed on the industry’s confidence. Only 48% of agents now describe their business outlook as optimistic, a steep drop from 60% in late 2025. This pessimism is most acute in the Northeast. where half of the agents surveyed feel discouraged. largely because that region remains heavily dependent on resale transactions. which are currently hovering near 40-year lows. In contrast, agents in the Southeast, where new construction remains more robust, remain the most hopeful, with 62% expressing optimism.
Amid these headwinds, the professional relationship between agents and the National Association of Realtors remains fractured. Only 9% of agents view the trade organization favorably, while 59% express an unfavorable opinion. Despite the volatility. commission structures have remained remarkably resilient since the March 2024 settlement; 88% of sell-side deals and 84% of buy-side deals still rely on fixed-percentage commissions. typically between 2% and 3%.
Technological change is filling the void left by market uncertainty. AI is now firmly embedded in the transaction. with 78% of agents reporting that clients are using AI tools to research pricing. listings. or the process itself. Over half of these clients use AI to probe neighborhoods. schools. or comparable sales. while 42% use it to parse through contracts and disclosures. Perhaps most challenging for the brokers. 23% of agents say clients have used AI to challenge their pricing. and 12% report that clients are using it to question commission fees.
Agents are responding in kind. with 90% now incorporating AI into their own workflows—primarily for drafting marketing copy. generating market analysis. and managing client communication. While iBuyer cash-offer options are discussed “very often” by only 4% of agents nationally. the adoption of AI suggests a broader transformation. Looking five years ahead. 53% of agents believe the technology will increase the value they provide. though 30% fear it will ultimately reduce the need for human agents entirely.
real estate market housing market trends AI in real estate mortgage rates agent sentiment homebuyer demand